Earnings yield is the quotient of earnings per share divided by the share price. It is the reciprocal of the price earnings ratio. In mathematics, a quotient is the end result of a division problem. ... Earnings per share (EPS) are the earnings returned on the initial investment amount. ... In economics and financial theory, analysts use random walk techniques to model behavior of asset prices, in particular share prices on stock markets, currency exchange rates and commodity prices. ... In mathematics, the reciprocal, or multiplicative inverse, of a number x is the number which, when multiplied by x, yields 1. ...
Applications
Earnings yield is one of the factors discussed in Joel Greenblatt's The Little Book That Beats the Market. Joel Greenblatt (born 1958 in Great Neck, New York) is a hedge fund manager, value investing guru, and adjunct professor at the Columbia University Graduate School of Business. ...