# Earnings Yield

EPS as a percentage of stock price. Inverse of P/E.

## Definition

Earnings yield is the inverse of the P/E ratio, expressed as a percentage. A P/E of 20x equates to an earnings yield of 5%.

## Formula

(EPS ÷ Stock Price) × 100

## Why it matters

Expressing P/E as a yield makes equities directly comparable to fixed-income alternatives. The 'Fed model' (earnings yield vs. 10-year Treasury yield) is one popular if controversial market-level valuation gauge.

## How Standard Equity uses it

Not shown directly. It is the inverse of the P/E ratio, which the main table shows.

## The metric

| Category | Yield |
| -------- | ----- |
| Unit     | %     |

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