• See Earnings Per Share.

 Embedded terms in definition
 Earnings per share
 Referenced Terms
 Ace: See Analysts' Consensus Eps.

 Analysists' consensus eps: Abbreviated ACE. An estimate of Eps derived by tabulating the projections of Wall Street analysts who follow a particular company.

 Average dividend yield: Combined with price appreciation, the average dividend yield (if any) can show a potential total return from a security investment. The formula for the average dividend yield is:
(Eps *Average Payout) / current price
where EPS = Estimated Future High EPS / (1 + EPS Growth) 2.5
Companies that pay a dividend will generally increase the dividend as EPS grow. Share price growth will usually follow the dividend increases, and thus keep dividend yield at a constant percentage.

 Average percent payout: The average of the percentage of a company's profits paid out in dividends to shareholders, typically calculated over the last five years. A high percent payout can be a danger sign. Recent payout figures higher than 50%, and higher than the average payout, may forewarn of a dividend cut. A dividend cut would likely cause the stock price to fall. Generally, the higher the payout ratio, the lower the expected growth rate for the company's Eps in the future.
Sometimes, although the dividend payout is more than earnings, the company has strong cash flow and can cover the dividend in the short term. However, a company paying out dividends in excess of earnings on a recurring basis is a risky investment.

 Basic earnings per share: Basic Eps. Earnings per share (EPS) calculated without regard to any contingent securities.There are two kinds of Earning per Share (Eps): basic and diluted. Basic shares are fewer in number than diluted. For Basic EPS, net income is divided by the number of common shares outstanding. This usually produces a larger EPS number than when using a diluted number of shares. Be consistent in the kind of EPS you use. See also: Diluted Earnings Per Share.

 Related Terms
 Analysists' consensus eps
Business model eps projection
Ebit eps approach
Pe ratio to eps growth
Primary eps

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