Operating Earnings Yield

View Financial Glossary Index

Definition

The operating earnings yield is annualized operating income as a percentage of the total value of the company's common stock. A ratio of nine percent means that annual operating earnings equivalent to nine percent of the company's market cap are being generated yearly. Generally, the higher this ratio is, the better.

Some investors consider this a better indicator of future earning power than earnings yield since the earnings number excludes tax effects, non-operating income and expenses, discontinued operations, extraordinary items, preferred stock dividends and accounting change differences.

Formula

YCharts calculation: TTM Operating Earnings / Market Capitalization

Where:

TTM Operating Earnings excludes:
- Earnings from discontinued operations
- Extraordinary items
- Preferred stock dividends
- Accounting changes
- Other non-operating earnings and expenses
- Taxes

Are you an investing professional?

Click here to request a live demo of YCharts Professional, our premium suite of tools and data.
Learn more about our professional products. Call (866) 965-7552 or email sales@ycharts.com

Search the Glossary

Advertisement

{{root.upsell.info.feature_headline}}.

{{root.upsell.info.feature_description}}

Please note that this feature is only available as an add-on to YCharts subscriptions.


Please note that this feature requires full activation of your account and is not permitted during the free trial period.

Start My Free Trial {{root.upsell.info.call_to_action}} No credit card required.

Already a subscriber? Sign in.