Earnings Yield
The earnings yield is the inverse of the PE Ratio. It is useful because you get the answer as a percentage and and then directly compare it to bonds and other securities more easily. To calculate the earnings yield, take the earnings per share / share price.
Legendary investor Joel Greenblatt takes it a step further. He uses the formula Earnings Yield = Earnings Before Interest and Taxes / Enterprise Value.
Enterprise value is calculated as market cap plus debt, minority interest and preferred shares, minus total cash and cash equivalents.
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