| earningYieldEP {stockAnalyst} | R Documentation |
Calculates Earning to Price Ratio, also known as Earning Yield.
Description
If an analyst is interested in a ranking, however, one solution (applicable to any ratio involving a quantity that can be negative or zero) is the use of an inverse price ratio which is the reciprocal of the original ratio (which places price in the denominator). The use of inverse price multiples addresses the issue of consistent ranking because price is never negative. In the case of the PE, the inverse price ratio is earnings to price (EP), known as the earnings yield. Ranked by earnings yield from highest to lowest, the securities are correctly ranked from cheapest to most costly in terms of the amount of earnings one unit of currency buys (Jerald E. Pinto, 2020).
Usage
earningYieldEP(currentShPr, TTMdilutedEPS)
Arguments
currentShPr |
number. |
TTMdilutedEPS |
vector. |
Details
According to information provided by Jerald E. Pinto (2020), the method earningYieldEP is developed for computing Earning to Price Ratio, also known as Earning Yield, for the values passed to its two arguments. Here, currentShPr is current Share Price and TTMdilutedEPS is trailing 12 month (TTM) diluted EPS. Output of 0.0638 represents an Earning Yield of 6.38 percent.
Value
Input values to two arguments currentShPr and TTMdilutedEPS.
Author(s)
MaheshP Kumar, maheshparamjitkumar@gmail.com
References
Pinto, J. E. (2020). Equity Asset Valuation (4th ed.). Wiley Professional Development (P&T). https://bookshelf.vitalsource.com/books/9781119628194
Examples
earningYieldEP(currentShPr=49.19,TTMdilutedEPS=3.14)