Switch to:
Jewett-Cameron Trading Co Ltd (NAS:JCTCF)
Earnings Yield (Joel Greenblatt)
16.39% (As of May. 2014)

Jewett-Cameron Trading Co Ltd's enterprise value for the quarter that ended in May. 2014 was $22.83 Mil. Jewett-Cameron Trading Co Ltd's Operating Income for the trailing twelve months (TTM) ended in May. 2014 was $3.74 Mil. Jewett-Cameron Trading Co Ltd's Earnings Yield (Joel Greenblatt) for the quarter that ended in May. 2014 was 16.39%.

JCTCF' s 10-Year Earnings Yield (Joel Greenblatt) Range
Min: 3.3   Max: 68.3
Current: 16.7

3.3
68.3

During the past 13 years, the highest Earnings Yield (Joel Greenblatt) of Jewett-Cameron Trading Co Ltd was 68.30%. The lowest was 3.30%. And the median was 20.05%.

JCTCF's Earnings Yield (Joel Greenblatt)is ranked higher than
93% of the 331 Companies
in the Global Lumber & Wood Production industry.

( Industry Median: 6.40 vs. JCTCF: 16.70 )

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. Jewett-Cameron Trading Co Ltd's Forward Rate of Return for the quarter that ended in May. 2014 was 36.35%. 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.


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.

Jewett-Cameron Trading Co Ltd's Earnings Yield (Joel Greenblatt) for the fiscal year that ended in Aug. 2013 is calculated as

Earnings Yield (Joel Greenblatt)=Operating Income/Enterprise Value
=4.674/32.382
=14.43 %

Jewett-Cameron Trading Co Ltd's Earnings Yield (Joel Greenblatt) for the quarter that ended in May. 2014 is calculated as

Earnings Yield (Joel Greenblatt)=Operating Income (TTM)/Enterprise Value
=3.742/22.83
=16.39 %

Jewett-Cameron Trading Co Ltd's Operating Income for the trailing twelve months (TTM) ended in May. 2014 was 1.236 (Aug. 2013 ) + 0.544 (Nov. 2013 ) + 0.409 (Feb. 2014 ) + 1.553 (May. 2014 ) = $3.74 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.

Jewett-Cameron Trading Co Ltd Annual Data

Aug04Aug05Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13
earning_yield_greenblatt 7.239.0517.0116.5630.9637.3145.8726.6041.4914.43

Jewett-Cameron Trading Co Ltd Quarterly Data

Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14
earning_yield_greenblatt 27.2535.0941.4931.0620.8318.0514.4318.6915.8016.39
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK