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) %. Hillshire Brands Co's Forward Rate of Return (Yacktman) % for the quarter that ended in Jun. 2014 was -25.49%. 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.
Hillshire Brands Co Earnings Yield % Calculation
Earnings yield is the reciprocal of the P/E Ratio.
Hillshire Brands Co's Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Jun. 2014 adds up the quarterly data reported by the company within the most recent 12 months, which was $1.150 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.
Hillshire Brands Co (LSE:HSH) 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.
Hillshire Brands Co Earnings Yield % Related Terms
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Hillshire Brands Co (LSE:HSH) Business Description
Hillshire Brands Co was organized as a corporation in Baltimore, Maryland in 1941 as The C.D. Kenny Company, was renamed Sara Lee Corporation in 1985 and adopted its current name in June 2012. It is a manufacturer and marketer of food products. It provides meat-centric food solutions for the retail and foodservice markets. The Company's Brands' portfolio includes iconic brands such as Jimmy Dean, Ball Park, Hillshire Farm, State Fair, Sara Lee frozen bakery and Chef Pierre pies, as well as artisanal brands Aidells and Gallo Salame. Its operations are organized around two business segments - Retail and Foodservice/Other. Retail sells a variety of packaged meat and frozen bakery products to retail customers in North America. Products include hot dogs and corn dogs, breakfast sausages, breakfast convenience items, including breakfast sandwiches and bowls, dinner sausages, premium deli and luncheon meats and cooked hams, as well as frozen pies, cakes, cheesecakes and other desserts. The primary raw materials for the segment's products include pork and beef, which are purchased almost entirely from third party suppliers and independent farmers, and poultry. The branded meat business is highly competitive, with an emphasis on product quality, innovation and value. New product innovations are a key component to its success. The Retail segment competes with other international, national, regional and local companies in each of the product categories. Foodservice/Other sells a variety of meat and bakery products to foodservice customers in North America. Products include hot dogs and corn dogs, breakfast sausages and sandwiches, dinner sausages, premium deli and luncheon meats, ham, beef and turkey as well as a variety of bakery products, including pastries, muffins, frozen pies, cakes and cheesecakes. The primary raw materials for Foodservice/Other's products include pork, beef and poultry and, to a lesser extent, wheat flour, sugar, corn syrup, cooking oils, butter, fruit and eggs, which are purchased from independent suppliers and farmers. The Foodservice/Other segment competes with other international, national, regional and local companies in each of its product categories. It considers major mass retailers and supermarket chains in the United States to be its most significant customers. The Company is subject to regulations administered by the U.S. Department of Agriculture and the Food and Drug Administration.
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