Earnings Yield Calculator
Earnings yield is earnings per share divided by share price, the inverse of the price-to-earnings (P/E) ratio. By expressing profitability as a percentage, it lets you compare a stock against bond yields and other investments on the same scale. This calculator takes earnings per share and share price and returns the earnings yield along with the implied P/E ratio. A P/E of 20 corresponds to a 5 percent earnings yield. Earnings yield can be negative if a company reports a loss, so interpret results in the context of growth, sector, and risk.
Earnings yield formula
Earnings yield = (earnings per share / share price) * 100
Price-to-earnings ratio = share price / earnings per share
Earnings yield = 1 / P/E ratio (as a percentage)
The earnings yield and the price-to-earnings ratio are reciprocals. A P/E of 25 implies a 4 percent earnings yield; a P/E of 10 implies a 10 percent earnings yield.
Earnings yield context
- Earnings yield is the inverse of the price-to-earnings ratio.
- It is often compared with bond yields to assess relative value.
- A higher yield can signal a cheaper valuation, all else equal.
- Trailing yield uses past earnings; forward yield uses forecast earnings.
- A negative yield reflects a loss and should be read with caution.
Earnings yield: frequently asked questions
What is earnings yield?
Earnings yield is a company's earnings per share divided by its share price, expressed as a percentage. It is the inverse of the price-to-earnings (P/E) ratio and shows how much a company earns relative to its price, in the same units as a bond or savings yield.
How is earnings yield calculated?
Earnings yield equals earnings per share divided by price per share, times 100 to express it as a percentage. Equivalently, it equals 1 divided by the price-to-earnings ratio. A P/E of 20 corresponds to an earnings yield of 5 percent.
Why use earnings yield instead of P/E?
Earnings yield puts a stock's profitability on the same percentage scale as bond yields and other investments, which makes comparison easier. Investors sometimes compare earnings yield with bond yields to gauge the relative attractiveness of stocks.
What is a high or low earnings yield?
A higher earnings yield means more earnings per dollar of price, which can signal a cheaper valuation, while a lower yield can signal a richer valuation or higher growth expectations. There is no universal threshold; it depends on the sector, growth, and risk.
Can earnings yield be negative?
Yes. If a company has negative earnings (a loss), earnings per share is negative, so earnings yield is negative. In that case the P/E ratio is also not meaningful in the usual sense, and the metric should be interpreted with care.
Official sources
- U.S. Securities and Exchange Commission: Investor.gov.
- U.S. Securities and Exchange Commission: SEC.gov.
Reviewed by the CalculatorHub team, edited by James Graham, 17 June 2026. See our methodology.