Equity Valuation

Earnings Yield

Definition

What is Earnings Yield?

Earnings per share divided by share price, the inverse of the P/E ratio.

Example in practice

₦10 EPS on a ₦100 share gives a 10% earnings yield.

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Net income attributable to ordinary shareholders divided by weighted average ordinary shares.

Earnings per share assuming potentially dilutive securities convert into ordinary shares.

Earnings per share calculated using actual weighted average ordinary shares outstanding.

Cash generated or used by a company's core operations.

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