---
title: "Definition of E/Y"
url: https://signalscreener.fr/definition/earnings-yield/
markdown_url: https://signalscreener.fr/definition/earnings-yield.md
description: "The inverse of the P/E ratio, showing how much earnings you get per dollar invested in the stock."
type: glossary-definition
site: Signal Screener
language: en
keywords:
  - "E/Y"
  - "Earnings Yield"
translations:
  de: https://signalscreener.fr/de/definition/earnings-yield.md
  es: https://signalscreener.fr/es/definition/earnings-yield.md
  fr: https://signalscreener.fr/fr/definition/earnings-yield.md
---

# Earnings Yield

## What is E/Y?

The inverse of the P/E ratio, showing how much earnings you get per dollar invested in the stock.

## Think of it like this

Like knowing the interest rate on a savings account - if a stock has 8% earnings yield, it's 'earning' 8 cents for every dollar of stock price.

## Formula

```
Earnings Yield = EPS ÷ Stock Price × 100 = 1 ÷ P/E Ratio × 100
```

- **EPS**: Earnings Per Share (trailing 12 months)
- **Stock Price**: Current market price per share

## Why it matters

- Easy to compare with bond yields
- Higher yield = potentially better value
- Used in Fed Model for market valuation
- Useful for value investors

## What's a good value?

| Range | Rating | What it means |
|---|---|---|
| > 8% | High Yield | Potentially undervalued |
| 5-8% | Moderate | Fair value range |
| 3-5% | Low Yield | Expensive or high-growth |
| < 3% | Very Low | Very expensive or negative earnings |

## Real-world example

A stock with P/E of 15 has an earnings yield of 6.7% (1/15). Compare this to a 10-year Treasury at 4%.

---

This is educational content, not financial advice.

Source: [Definition of E/Y](https://signalscreener.fr/definition/earnings-yield/) on Signal Screener. Free to quote and cite with attribution and a link to that URL, which is the canonical one.

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