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@mikel

To calculate a stock's earnings yield, you need to divide the earnings per share (EPS) by the stock price. The formula is as follows:

Earnings Yield = Earnings per Share (EPS) / Stock Price

Here's a step-by-step guide to calculating the earnings yield:

- Determine the company's earnings per share (EPS) from its latest financial statements. EPS is calculated by dividing the company's net earnings by the number of outstanding shares.
- Determine the current stock price. You can find this information by looking at financial news websites, stock exchange websites, or your brokerage account.
- Divide the earnings per share (EPS) by the stock price. This will give you the earnings yield.

For example, if a company has an EPS of $2 and the stock price is $40:

Earnings Yield = $2 / $40 = 0.05 or 5%

Therefore, the earnings yield of the stock is 5%.

The earnings yield is primarily used as a valuation metric to assess the attractiveness of a stock's earnings relative to its market price. It is often compared to other investment alternatives such as bonds or the overall stock market to determine if a stock is undervalued or overvalued.

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