# Earnings yield

From ACT Wiki

The earnings per share divided by the market price, expressed as a percentage.

**Example 1**

GeeCo's share price is 200p.

Its relevant earnings per share for the earnings yield calculation are 12p.

The earnings yield on this basis is:

12 / 200

= 6%

**Relationship between earnings yield and price/earnings ratio**

The reciprocal of the earnings yield is the price/earnings ratio (PER).

**Example 2**

GeeCo's share price is 200p.

Its relevant earnings per share (EPS) for earnings yield calculation are 12p.

GeeCo's earnings yield is 6% (= 0.06)

The PER on this basis is the reciprocal of the earnings yield:

1 / 0.06

= 16.7

*The PER can also be calculated directly from the share price and EPS as: 200/12 = 16.7.*