What is Heritage Oaks Bancorp Forward Rate of Return (Yacktman) %?
Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. Heritage Oaks Bancorp's forward rate of return for was 18.45%.
The historical rank and industry rank for Heritage Oaks Bancorp's Forward Rate of Return (Yacktman) % or its related term are showing as below:
HEOP's Forward Rate of Return (Yacktman) % is not ranked *
in the Banks industry.
Industry Median: 17.87 * Ranked among companies with meaningful Forward Rate of Return (Yacktman) % only.
Unlike the Earnings Yield %, 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.
Heritage Oaks Bancorp Forward Rate of Return (Yacktman) % Historical Data
The historical data trend for Heritage Oaks Bancorp's Forward Rate of Return (Yacktman) % can be seen below:
* 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.
* Premium members only.
Heritage Oaks Bancorp Forward Rate of Return (Yacktman) % Chart
Competitive Comparison of Heritage Oaks Bancorp's Forward Rate of Return (Yacktman) %
For the Banks - Regional subindustry, Heritage Oaks Bancorp's Forward Rate of Return (Yacktman) %, along with its competitors' market caps and Forward Rate of Return (Yacktman) % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Heritage Oaks Bancorp's Forward Rate of Return (Yacktman) % Distribution in the Banks Industry
For the Banks industry and Financial Services sector, Heritage Oaks Bancorp's Forward Rate of Return (Yacktman) % distribution charts can be found below:
* The bar in red indicates where Heritage Oaks Bancorp's Forward Rate of Return (Yacktman) % falls into.
Heritage Oaks Bancorp Forward Rate of Return (Yacktman) % Calculation
Forward Rate of Return is a concept that Don Yacktman uses in his investment approach. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. He said in the interview (March 2012, when the S&P 500 was at about 1400):
If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.
The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).
* 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.
Unlike the Earnings Yield, the Forward Rate of Return uses the normalized Free Cash Flow of the past five 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.
For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of Book Value per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over five years. The reason we use five years is to make it comparable to the growth rate.
Be Aware
In the Forward Rate of Return calculation, the growth rate is added directly to today's free cash flow yield. Therefore the calculation is reliable only if the company can grow at the same rate in the future as it did in the past. Investors should pay close attention to this when researching growth stocks. A more accurate measurement for return is Return on Capital.
Heritage Oaks Bancorp Forward Rate of Return (Yacktman) % Related Terms
Thank you for viewing the detailed overview of Heritage Oaks Bancorp's Forward Rate of Return (Yacktman) % provided by GuruFocus.com. Please click on the following links to see related term pages.
Heritage Oaks Bancorp (Heritage Oaks Bancorp) Business Description
Heritage Oaks Bancorp is a California corporation organized in 1994 and registered as a bank holding company. The Company acquired all of the outstanding common stock of Heritage Oaks Bank (Bank) and its subsidiaries in 1994. The Bank is a community-oriented financial services firm that provides banking products and services to small and medium sized businesses and consumers. Products and services are offered primarily through 12 retail branches located on the Central Coast of California, in San Luis Obispo and Santa Barbara Counties and through other direct channels, including two loan production offices in Santa Barbara and Ventura Counties. The Bank offers to its commercial clients commercial loans secured by real estate, other commercial loans and lines of credit, agricultural loans, construction financing, other real estate loans and SBA loans. For consumers, the Bank offers residential mortgages, equity lines of credit and other consumer loans. Deposit products offered include personal and business checking and savings accounts, time deposit accounts, individual retirement accounts ("IRAs") and money market accounts. The Bank also offers online banking, mobile banking, wire transfers, safe deposit boxes, cashier's checks, traveler's checks, bank-by-mail, night depository services and other customary banking services. The Company's competitors include money center banks and large regional banks. Competition also includes other community-focused commercial banks. As a bank holding company, the Company is regulated under the Bank Holding Company Act ("BHC Act") and is subject to inspection, examination and supervision by the Federal Reserve. It is also subject to the California Financial Code, as well as limited oversight by the DBO and the FDIC.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
HEOP has been successfully added to your 