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Cal-Maine Foods Inc's enterprise value for the quarter that ended in Feb. 2016 was $2,233 Mil. Cal-Maine Foods Inc's Earnings Before Interest and Taxes (EBIT) for the trailing twelve months (TTM) ended in Feb. 2016 was $552 Mil. Cal-Maine Foods Inc's Earnings Yield (Joel Greenblatt) for the quarter that ended in Feb. 2016 was 24.75%.
During the past 13 years, the highest Earnings Yield (Joel Greenblatt) of Cal-Maine Foods Inc was 37.00%. The lowest was 2.70%. And the median was 15.20%.
Joel Greenblatts definition of earnings yield has the same problems the regular earnings yield does. It does not consider the growth of the company. It only looks at one-years business operation. For cyclical companies, the earnings yield is usually highest at the peak of the business cycle. But these earnings are rarely sustainable.
A better indicator of the attractiveness of an investment which takes growth into account is the Forward Rate of Return. Cal-Maine Foods Inc's Forward Rate of Return for the quarter that ended in Feb. 2016 was 33.77%. 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.
In his book, The Little That Beat the Market, hedge fund manager Joel Greenblatt defines Earnings Yield as operating income divided by enterprise value.
Cal-Maine Foods Inc's Earnings Yield (Joel Greenblatt) for the fiscal year that ended in May. 2015 is calculated as
|Earnings Yield (Joel Greenblatt)||=||Earnings Before Interest and Taxes (EBIT)||/||Enterprise Value|
Cal-Maine Foods Inc's Earnings Yield (Joel Greenblatt) for the quarter that ended in Feb. 2016 is calculated as
|Earnings Yield (Joel Greenblatt)||=||Earnings Before Interest and Taxes (EBIT) (TTM)||/||Enterprise Value|
Cal-Maine Foods Inc's Earnings Before Interest and Taxes (EBIT) for the trailing twelve months (TTM) ended in Feb. 2016 was 80.077 (May. 2015 ) + 220.108 (Aug. 2015 ) + 166.159 (Nov. 2015 ) + 85.771 (Feb. 2016 ) = $552 Mil.
Joel Greenblatt defines the earnings yield using the above equation because it more accurately reflects the companys profitability relative to its stock price. Items like interest payment and tax etc. are not directly related to the companys operational profitability.
Enterprise Value instead of market cap (share price) is used in the calculation because it is the real price stock and bond investors together pay for the company.
Forward Rate of Return based on Don Yacktmans definition is a better measure of the expected rate of return for a stock.
Cal-Maine Foods Inc Annual Data
Cal-Maine Foods Inc Quarterly Data