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Earnings Yield Ratio Calculator

Calculate the earnings yield ratio (EPS ÷ share price) — the inverse of the P/E ratio — to compare a stock's earnings power against bonds and other assets.

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Results are for informational purposes only. Always verify with a qualified professional.

⚠️ Please fill in all required fields with valid numbers.

Everyday Uses

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Stock vs bond comparison

Earnings yield puts stocks in the same percentage language as bond yields.

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Valuation screening

The inverse of P/E — higher yield can flag cheaper stocks worth a look.

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Market-level checks

Compare an index's earnings yield with interest rates to judge overall valuation.

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The earnings-price link from the other side

Understand the earnings-price relationship from the yield side.

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Price-to-earnings turned upside down

Inverting the P/E gives a percentage you can place directly beside a bond yield or a savings rate, which makes very different assets briefly comparable.

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Only as good as the earnings

The yield inherits every weakness of the profit figure beneath it. Accounting adjustments, one-off disposals and aggressive revenue recognition all flatter it.

Frequently Asked Questions

What is the earnings yield ratio formula?

Earnings Yield = (Earnings Per Share ÷ Market Price Per Share) × 100. It expresses a company's earnings as a percentage return on the current share price — mathematically, it is simply the reciprocal of the P/E ratio (1 ÷ P/E × 100).

How is earnings yield different from the P/E ratio?

The P/E ratio (price ÷ EPS) tells you how many years of earnings you're paying for in the share price — lower is generally cheaper. Earnings yield (EPS ÷ price) flips that into a percentage return, similar in form to a bond yield, which makes it easier to compare a stock's earnings power directly against bond yields or other percentage-based returns.

What is a good earnings yield?

There's no fixed threshold, but earnings yield is most useful compared against the prevailing risk-free rate (e.g., 10-year government bond yield). An earnings yield well above the bond yield suggests stocks may be attractively priced relative to bonds; an earnings yield below the bond yield suggests investors are paying a premium for growth or paying up after a price runup.

Why compare earnings yield to bond yields?

Both are expressed as a percentage return relative to the price paid, which makes a side-by-side comparison intuitive. This comparison — sometimes called the "Fed model" — gauges whether stocks are cheap or expensive relative to safer fixed-income alternatives at a given point in time, though it has well-known limitations and shouldn't be used alone.

Does a high earnings yield always mean a stock is a bargain?

Not necessarily. A high earnings yield (low P/E) can reflect a genuine bargain, but it can also reflect the market pricing in declining future earnings, industry headwinds, or elevated risk. Always check why the yield is high — slowing growth, debt concerns, or a cyclical downturn — rather than treating it as an automatic buy signal.

Can earnings yield be negative?

Yes — if a company reports a net loss, EPS is negative, making earnings yield negative too. A negative earnings yield simply mirrors an undefined or meaningless P/E ratio for a loss-making company, and investors typically switch to other valuation metrics (price-to-sales, price-to-book) until earnings turn positive.