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Sometimes it is more useful to look at companies on a yield perspective, that way you can compare them to "safe" assets and see how compelling a company really
by jakarta 16y ago
Sometimes it is more useful to look at companies on a yield perspective, that way you can compare them to "safe" assets and see how compelling a company really is.
In this case, Amazon features an earnings yield of:
1.4% and a Free Cash Flow yield of: 2.1%
10 Year US Treasuries are yielding 2.57%
Amazon, like Netflix, is run by a great operator. Both companies are trading at sky high valuations and it leaves little room for error. I could see both companies coming out on top, but I don't see much safety in either stock.
- borism 16y agowow, great comparison! So essentially earnings yield is E/P, the inverse (reciprocal) of P/E. Never heard such term before, but the concept looks so easy in comparison to P/E numbers. Treasuries price moves inversely to the yield, so that should be taken into account when comparing to them. CD is probably a better point of comparison.
- krelian 16y agoYou just made me looks at stocks in a whole different angle.