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ECB Bancorp Inc (AMEX:ECBE)
Earnings Yield (Joel Greenblatt)
0.68% (As of Sep. 2012)

ECB Bancorp Inc's enterprise value for the quarter that ended in Sep. 2012 was $104.12 Mil. ECB Bancorp Inc's Operating Income for the trailing twelve months (TTM) ended in Sep. 2012 was $0.70 Mil. ECB Bancorp Inc's Earnings Yield (Joel Greenblatt) for the quarter that ended in Sep. 2012 was 0.68%.

ECBE' s 10-Year Earnings Yield (Joel Greenblatt) Range
Min: 0   Max: 0
Current: 0

ECBE's Earnings Yield (Joel Greenblatt)is ranked lower than
77% of the 1606 Companies
in the Global Banks - Regional - US industry.

( Industry Median: 6.90 vs. ECBE: 0.00 )

Joel Greenblatt’s 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-year’s 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. ECB Bancorp Inc's Forward Rate of Return for the quarter that ended in Sep. 2012 was 19.56%. 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.


Definition

In his book, “The Little That Beat the Market,” hedge fund manager Joel Greenblatt defines Earnings Yield as operating income divided by enterprise value.

ECB Bancorp Inc's Earnings Yield (Joel Greenblatt) for the fiscal year that ended in Dec. 2011 is calculated as

Earnings Yield (Joel Greenblatt)=Operating Income/Enterprise Value
=-2.568/66.2745
= %

ECB Bancorp Inc's Earnings Yield (Joel Greenblatt) for the quarter that ended in Sep. 2012 is calculated as

Earnings Yield (Joel Greenblatt)=Operating Income (TTM)/Enterprise Value
=0.704/104.12
=0.68 %

ECB Bancorp Inc's Operating Income for the trailing twelve months (TTM) ended in Sep. 2012 was -2.871 (Dec. 2011 ) + 0.349 (Mar. 2012 ) + 0.756 (Jun. 2012 ) + 2.47 (Sep. 2012 ) = $0.70 Mil.

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

Joel Greenblatt defines the earnings yield using the above equation because it more accurately reflects the company’s profitability relative to its stock price. Items like interest payment and tax etc. are not directly related to the company’s 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.


Be Aware

Joel Greenblatt’s 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-year’s business operation. For cyclical companies, the earnings yield is usually highest at the peak of the business cycle. But these earnings are rarely sustainable.

Forward Rate of Return based on Don Yacktman’s definition is a better measure of the expected rate of return for a stock.


Related Terms

Operating Income, Enterprise Value, Earnings Yield, Forward Rate of Return


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

ECB Bancorp Inc Annual Data

Dec02Dec03Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11
earning_yield_greenblatt 6.937.206.249.008.376.783.551.380.100.00

ECB Bancorp Inc Quarterly Data

Jun10Sep10Dec10Mar11Jun11Sep11Dec11Mar12Jun12Sep12
earning_yield_greenblatt 0.090.430.100.000.000.000.000.000.000.68
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