##### Asked by: Iscle El Otmani

asked in category: General Last Updated: 30th May, 2020# What is earning yield ratio?

**earnings yield**refers to the

**earnings**per share for the most recent 12-month period divided by the current market price per share. The

**earnings yield**(which is the inverse of the P/E

**ratio**) shows the percentage of how much a company earned per share.

Simply so, what is a good earnings yield ratio?

The **yield** is a **good** ROI. It is most commonly measured as net income divided by the original capital cost of the investment. The higher the **ratio**, the greater the benefit earned.

Also Know, what is the difference between earnings yield and dividend yield? The key is that **dividend yields** are the amount that the company decides to pay. In reality, when an investor buys a stock he is buying the future cash flow potential of a company and **earnings yield** is one way to measure at least the current valuation to income.

Correspondingly, how do you calculate earnings yield ratio?

**Earnings yield** is defined as EPS divided by the stock price (E/P). In other words, it is the reciprocal of the P/E **ratio**. Thus, **Earnings Yield** = EPS / Price = 1 / (P/E **Ratio**), expressed as a percentage.

What does PEG ratio mean?

The '**PEG ratio**' (price/earnings to growth **ratio**) **is** a valuation metric for determining the relative trade-off between the price of a stock, the earnings generated per share (EPS), and the company's expected growth. Thus, using just the P/E **ratio** would make high-growth companies appear overvalued relative to others.