What is Constant Contact Forward Rate of Return (Yacktman) %?
Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. Constant Contact's forward rate of return for was 31.11%.
The historical rank and industry rank for Constant Contact's Forward Rate of Return (Yacktman) % or its related term are showing as below:
CTCT's Forward Rate of Return (Yacktman) % is not ranked *
in the Media - Diversified industry.
Industry Median: 7.89 * 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.
Constant Contact Forward Rate of Return (Yacktman) % Historical Data
The historical data trend for Constant Contact'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.
Constant Contact Forward Rate of Return (Yacktman) % Chart
Competitive Comparison of Constant Contact's Forward Rate of Return (Yacktman) %
For the Advertising Agencies subindustry, Constant Contact'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.
Constant Contact's Forward Rate of Return (Yacktman) % Distribution in the Media - Diversified Industry
For the Media - Diversified industry and Communication Services sector, Constant Contact's Forward Rate of Return (Yacktman) % distribution charts can be found below:
* The bar in red indicates where Constant Contact's Forward Rate of Return (Yacktman) % falls into.
Constant Contact 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.
Constant Contact (NAS:CTCT) Forward Rate of Return (Yacktman) % Explanation
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 EBITDA 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.
Constant Contact Forward Rate of Return (Yacktman) % Related Terms
Thank you for viewing the detailed overview of Constant Contact's Forward Rate of Return (Yacktman) % provided by GuruFocus.com. Please click on the following links to see related term pages.
Constant Contact (Constant Contact) Business Description
Constant Contact Inc was incorporated in Massachusetts in 1995 under the name Roving Software Incorporated. The Company provides online marketing tools that are designed for small organizations, including small businesses, associations and non-profits. Its suite of online marketing tools, which include Email Marketing, EventSpot, Social Campaigns, SaveLocal, SinglePlatform and Survey, enable its customers to launch and monitor marketing campaigns across multiple channels, including email, social media, events, local deals, online listings and surveys. Its customers include various types of small organizations including retailers, restaurants, law and accounting firms, consultants, non-profits, religious organizations and alumni associations. Its email marketing product allows customers to easily create, send and track professional-looking email campaigns. The product includes a campaign creation wizard that makes it easy to create and edit email campaigns with access to over 300 pre-designed email campaign templates that reflect a wide variety of themes and styles and over 15 million images through its relationship with Bigstock, a subsidiary of Shutterstock, Inc. The Company also offers market leading free tools and applications that allow customers to add and update contacts, including adding contacts directly from a computer or point of sale device. Its event marketing product allows its customers to promote and manage events, communicate with invitees and registrants, capture and track registrations and collect online payments. The Company's social media products include Social Campaigns, which empowers customers to reach and engage users on Facebook to grow their fans and create social word-of-mouth through easy-to-create offers and promotions. SaveLocal provides service to its customers to retain existing customers and attract new customers by creating, running and managing local deals, and provides them with end-to-end control over their deals at an affordable price. The Company's online survey product enables its customers to survey their customers or members and analyze responses. SinglePlatform provides its customers the power to manage all of their key online listings from one place by helping them to create a content rich digital storefront, which can include menus, photos, services, offers and featured products. As of December 31, 2013, the Company served a large and diverse group of approximately 595,000 unique paying customers. Its Social Campaigns product competes with offerings by Offerpop Corporation, Pagemodo, a subsidiary of VistaPrint N.V., Vocus Social Media LLC doing business as North Social and Wildfire Interactive, Inc. Its SaveLocal product competes with offerings by Groupon, Inc., LivingSocial, Inc., Amazon Local and Google Offers. Its SinglePlatform product competes with offerings by Yext, Inc. and Locu Inc., a subsidiary of GoDaddy.com, LLC. Its survey product competes with offerings by Surveymonkey.c
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