Earnings yield
ValuationEarnings per share divided by price, the inverse of the P/E ratio.
Why it matters: It offers an intuitive yield-like view but inherits the weaknesses of the earnings measure.
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Finance, translated.
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2 terms
P/E ratio
ValuationPrice per share divided by earnings per share.
Why it matters: It reflects expectations but can mislead when earnings are cyclical, negative, or unusually adjusted.