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Earnings per share (EPS) is the monetary value of earnings per outstanding share of common stock for a company during a defined period of time. It is a key measure of corporate profitability, focussing on the interests of the company's owners ( shareholders ), [ 1 ] and is commonly used to price stocks.
Divide the stock price by earnings per share and you get the stock’s P/E ratio. With EPS and the P/E ratio, investors have an easy way to compare companies, letting them quickly judge the profit ...
Earnings per share can be used with other financial indicators to understand a company's profitability. But how is it calculated and how useful is it, really?
The dividend payout ratio is calculated as DPS/EPS. According to Financial Accounting by Walter T. Harrison, the calculation for the payout ratio is as follows: Payout Ratio = (Dividends - Preferred Stock Dividends)/Net Income. The dividend yield is given by earnings yield times the dividend payout ratio:
Even more impressive is the 21.5% higher estimated earnings per share (EPS) this new year, driven by improving profitability margins from Apple's diverse group of high-growth services.
Earning yield is the quotient of earnings per share (E), divided by the share price (P), giving E/P. [1] It is the reciprocal of the P/E ratio. The earning yield is quoted as a percentage, and therefore allows immediate comparison to prevailing long-term interest rates (e.g. the Fed model).
That's understandable. After all, management's stated aim is to pay about 50% of its adjusted earnings per share (EPS) in dividends. Unfortunately, with the market expecting just $7.49 in EPS this ...
One of them is earnings per share (EPS), which is one way to measure a company's profitability. The higher … Continue reading ->The post What Is a Good Earnings Per Share (EPS)? appeared first ...