Market Cap : 68.75 B | Enterprise Value : 65.1 B | PE Ratio : 7.11 | PB Ratio : 1.40 |
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Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. Micron Technology's forward rate of return for was 6.26%.
The historical rank and industry rank for Micron Technology's Forward Rate of Return (Yacktman) % or its related term are showing as below:
During the past 13 years, Micron Technology's highest Forward Rate of Return was 27.66. The lowest was 5.44. And the median was 22.39.
MU's Forward Rate of Return (Yacktman) % is ranked worse thanUnlike 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.
The historical data trend for Micron Technology'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.
For the Semiconductors subindustry, Micron Technology'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.
For the Semiconductors industry and Technology sector, Micron Technology's Forward Rate of Return (Yacktman) % distribution charts can be found below:
* The bar in red indicates where Micron Technology's Forward Rate of Return (Yacktman) % falls into.
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).
Micron Technology's Forward Rate of Return of May. 2022 is
Forward Rate of Return | = | Normalized Free Cash Flow | / | Price | + | 5-Year EBITDA Growth Rate |
= | 3.33219048 | / | 73.84 | + | 0.0175 | |
= | 6.26 % |
* 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.
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.
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.
Thank you for viewing the detailed overview of Micron Technology's Forward Rate of Return (Yacktman) % provided by GuruFocus.com. Please click on the following links to see related term pages.
Murphy Mark J. | officer: EVP & Chief Financial Officer | DELPHI AUTOMOTIVE PLC 5725 DELPHI DRIVE TROY MI 48098 |
Beard Robert P | officer: SVP, General Counsel&Secretary | 8000 S. FEDERAL WAY BOISE ID 83716 |
Haynesworth Linnie M | director | 214 N TRYON STREET CHARLOTTE NC 28202 |
Allen Scott R. | officer: CVP, Chief Accounting Officer | 11690 N.W. 105TH STREET MIAMI FL 33178 |
Dugle Lynn A | director | 4803 STONECROFT BOULEVARD CHANTILLY VA 20151 |
Marosvari Paul | officer: VP, Chief Accounting Officer | 8000 S. FEDERAL WAY BOISE ID 83716 |
Wright Mary Ann | director | 250 STEPHENSON HIGHWAY TROY MI 48083 |
Gomo Steven J | director | 495 E. JAVA DRIVE SUNNYVALE CA 94089 |
Mccarthy Mary Pat | director | 2704 WEST 112TH STREET LEAWOOD KS 66211 |
Bokan Michael W | officer: SVP, WORLDWIDE SALES | 8000 S FEDERAL WAY MS 1-557 BOISE ID 83716 |
Zinsner David | officer: SVP & Chief Financial Officer | 1001 MURPHY RANCH ROAD MILPITAS CA 95035 |
Bhatia Manish H | officer: EVP, Global Operations | C/O WESTERN DIGITAL CORPORATION 5601 GREAT OAKS PARKWAY SAN JOSE CA 95119 |
Sadana Sumit | officer: EVP & Chief Business Officer | 47544 AVALON HEIGHTS TERRACE FREMONT CA 94539 |
Mehrotra Sanjay | officer: President & CEO | C/O WESTERN DIGITAL CORPORATION 3355 MICHELSON DRIVE, SUITE 100 IRVINE CA 92612 |
Maddock Ernest E | officer: CFO & VP, Finance | LAM RESEARCH 4650 CUSHING PARKWAY FREMONT CA 94538 |
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