Stock Earnings Yield Calculator
Inverse of P/E ratio — earnings per price.
Calculate stock earnings yield as the inverse of P/E ratio. Instant results from your inputs, with the methodology visible.
What this tool does
Enter P/E ratio. The tool shows earnings yield percentage.
Enter Values
Formula Used
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Calculations, display, or translation — let us know.
Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
Stock with P/E 20: earnings yield = 1/20 = 5%. Easy comparison to bond yields. When stock earnings yield exceeds bond yield, equities relatively attractive; below, bonds favoured. 'Fed model' uses this comparison.
Quick example
With p/e ratio of 20, the result is 5.00%. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.
Why investors run this
Most people's intuition for compounding is wrong — not because the math is hard, but because linear thinking doesn't account for curves. Running numbers through a calculator like this one is the cheapest way to recalibrate that intuition before making an irreversible decision about contribution rate, asset mix, or retirement age.
What this doesn't capture
Steady-rate math ignores real-world volatility. Actual returns are lumpy; sequence-of-returns risk matters most in drawdown; fees and taxes drag on compound growth; and behaviour changes in drawdowns can reduce outcomes below the projection. Treat the number as one scenario, not a forecast.
Where to go next
This calculation rarely sits alone in a planning exercise. If you're running these numbers, you'll probably also want the price to earnings calculator, the equity return calculator, and the margin of safety calculator — each one answers a different question in the same territory. Treating them as a set rather than in isolation usually produces a more honest picture.
Earnings yield produces a percentage based on the inputs provided.
Inputs
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
Inverse of P/E.
References
Frequently Asked Questions
Good benchmark?
Fed model?
Forward vs trailing?
Quality matters?
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