Earnings Yield

Earnings Yield is the inverse of the Price-to-Earnings (P/E) ratio, calculated as: Earnings Yield = Earnings Per Share ÷ Market Price Per Share × 100. It expresses a company's earnings as a percentage of its share price, allowing investors to compare equities with fixed-income instruments like bonds. A higher earnings yield suggests a stock may be undervalued relative to its earnings, while a low earnings yield indicates a premium valuation. Comparing the earnings yield of the Nifty 50 to government bond yields is a widely used framework for assessing equity market attractiveness.