The earnings yield is an indication of how much return shareholders' investment in the company earned over the past 12 months. The higher the earnings yield is, the better.
The earnings yield does not consider the growth of the business. A better indicator of the attractiveness of an investment which takes growth into account is the Forward Rate of Return (Yacktman) %. National Interstate's Forward Rate of Return (Yacktman) % for the quarter that ended in Sep. 2016 was -4.35%. The Forward Rate of Return uses the normalized Free Cash Flow of the past seven years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
National Interstate Earnings Yield % Calculation
Earnings yield is the reciprocal of the P/E Ratio.
National Interstate's Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Sep. 2016 adds up the quarterly data reported by the company within the most recent 12 months, which was $1.380 Mil.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
It can also be calculated from the numbers for the whole company:
The earnings in the calculation is the Trailing Twelve Months earnings.
National Interstate (NAS:NATL) Earnings Yield % Explanation
If the P/E ratio is an indication of how many years it takes for the company to earn back the stock price shareholders pay to buy the shares, the earnings yield is an indication of how much return shareholders' investment in the company earned over the past 12 months. The higher the earnings yield is, the better.
If a company loses money, the earnings yield is negative. This gives a more straightforward indication that the company is losing money. This is an advantage of using earnings yield instead of the P/E ratio in valuation. For valuation purposes, the P/B Ratio and the P/S Ratio should be used for companies that are losing money.
Like the P/E ratio, the earnings yield can be used to compare investments in different industries. It can even be used to compare the attractiveness of different asset classes such as bonds and cash. Of course, the earnings yield should not be the only factor in deciding which asset classes to invest.
Also similar to the P/E ratio, the earnings yield does not consider the growth of the business. A growing company with the same earnings yield should be more attractive than a company that has the same earnings yield but does not grow.
Just like the P/E Ratio, non-recurring items such as selling part of the business, selling a previous investment, etc., can affect earnings yield dramatically. The earning yield is also a poor indication for cyclical companies. When a cyclical stock has a high earnings yield it is usually at the peak of its cycle.
National Interstate Earnings Yield % Related Terms
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National Interstate (National Interstate) Business Description
National Interstate Corp was founded in 1989. The Company, together with its subsidiaries operates as an insurance holding company group that underwrites and sells traditional and alternative property and casualty insurance products to the passenger transportation, trucking and moving and storage industries, general commercial insurance to small businesses in Hawaii and Alaska and personal insurance to owners of recreational vehicles throughout the United States. It is a specialty property and casualty insurance company with a niche orientation and a focus on the transportation industry. It offers over 40 product lines in the specialty property and casualty insurance market, which it groups into four general business components, alternative risk transfer, transportation, specialty personal lines and Hawaii and Alaska based on the class of business, insureds' risk participation or geographic location. Alternative risk transfer underwrites, markets and distributes truck transportation, passenger transportation and moving and storage ART insurance products, also known as captives. Transportation underwrites commercial auto liability, general liability, physical damage, workers' compensation and motor truck cargo and related coverages for truck and passenger operators. Specialty personal lines offer coverage for campsite liability, vehicle replacement coverage and coverage for trailers, golf carts and campsite storage facilities. The Company offers its products through multiple distribution channels including independent agents and brokers, program administrators, affiliated agencies and agent internet initiatives. The Company competes with Lancer Insurance Company, RLI Corporation, Great West Casualty Company, Northland Insurance Company, Sentry Insurance, Progressive Corporation and National General Insurance, Liberty Mutual Insurance Company, First Insurance, Dongbu Insurance Company, DTRIC Insurance Company, Zurich Insurance Company, American International Group, Inc., Travelers Company, Inc.
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