The earnings yield is an indication of how much return shareholders' investment in the company earned over the past 12 months. The higher the earnings yield is, the better.
The earnings yield does not consider the growth of the business. A better indicator of the attractiveness of an investment which takes growth into account is the Forward Rate of Return (Yacktman) %. Cadence Design Systems's Forward Rate of Return (Yacktman) % for the quarter that ended in Mar. 2026 was 20.31%. 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.
Cadence Design Systems (MEX:CDNS) Earnings Yield % Explanation
If the P/E ratio is an indication of how many years it takes for the company to earn back the stock price shareholders pay to buy the shares, the earnings yield is an indication of how much return shareholders' investment in the company earned over the past 12 months. The higher the earnings yield is, the better.
If a company loses money, the earnings yield is negative. This gives a more straightforward indication that the company is losing money. This is an advantage of using earnings yield instead of the P/E ratio in valuation. For valuation purposes, the P/B Ratio and the P/S Ratio should be used for companies that are losing money.
Like the P/E ratio, the earnings yield can be used to compare investments in different industries. It can even be used to compare the attractiveness of different asset classes such as bonds and cash. Of course, the earnings yield should not be the only factor in deciding which asset classes to invest.
Also similar to the P/E ratio, the earnings yield does not consider the growth of the business. A growing company with the same earnings yield should be more attractive than a company that has the same earnings yield but does not grow.
Just like the P/E Ratio, non-recurring items such as selling part of the business, selling a previous investment, etc., can affect earnings yield dramatically. The earning yield is also a poor indication for cyclical companies. When a cyclical stock has a high earnings yield it is usually at the peak of its cycle.
Cadence Design Systems Earnings Yield % Related Terms
Cadence Design Systems's Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Mar. 2026 adds up the quarterly data reported by the company within the most recent 12 months, which was MXN78.143 Mil.
* 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.
It can also be calculated from the numbers for the whole company:
Cadence Design Systems (MEX:CDNS) has a Earnings Yield % of 1.20% as of Jun. 30, 2026. Earnings Yield equals per-share earnings divided by share price. It is the inverse of the price-earnings ratio. View historical data on Cadence Design Systems and its competitors.
Is Cadence Design Systems' Earnings Yield % too high?
Cadence Design Systems' current Earnings Yield % is 1.20%. Overall, Cadence Design Systems has a GF Score™ of 98/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Cadence Design Systems' Earnings Yield % compare to NOW and ADP?
Cadence Design Systems' Earnings Yield % of 1.20% can be compared against companies in the Software industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Earnings Yield % for a Software company?
A good Earnings Yield % depends on the Software industry context. However, Earnings Yield % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Earnings Yield % mean?
A high Earnings Yield % can signal that a stock is expensive relative to its fundamentals. Earnings Yield equals per-share earnings divided by share price. It is the inverse of the price-earnings ratio. View historical data on Cadence Design Systems and its competitors. Cadence Design Systems's current Earnings Yield % is 1.20%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Cadence Design Systems stock overvalued right now?
Based on GuruFocus' analysis, Cadence Design Systems (MEX:CDNS) is currently considered Fairly Valued. The stock's GF Value™ is MXN6,613.03, compared to a current price of MXN6,537.43 — trading 1.1% below its estimated fair value. The current Earnings Yield % is 1.20%. Cadence Design Systems' overall GF Score™ is 98/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Earnings Yield % calculated?
Earnings Yield % is calculated from a company's financial statements. For Cadence Design Systems (MEX:CDNS), the current Earnings Yield % is 1.20% as of Jun. 30, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Cadence Design Systems (MEX:CDNS) Overvalued in 2026?
Based on GuruFocus' analysis, Cadence Design Systems stock appears to be undervalued.
The current stock price of MXN6,537.43 is trading 1.1% below its estimated GF Value™ of MXN6,613.03.
GuruFocus considers Cadence Design Systems to be Fairly Valued.
Key valuation signals for MEX:CDNS:
Earnings Yield %: 1.20%
GF Value™: MXN6,613.03 vs. price of MXN6,537.43 (1.1% below fair value)
No single metric tells the full story. See the MEX:CDNS stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Cadence Design Systems is a provider of electronic design automation software, intellectual property, and system design and analysis products. EDA software automates and aids in the chip design process, enhancing design accuracy, productivity, and complexity in a full-flow end-to-end solution. Cadence offers a portfolio of design IP, as well as system design and analysis products, which enables system-level analysis and verification solutions.
98GF Score
Get the complete analysis for MEX:CDNS
Earnings Yield % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
MEX:CDNS has been successfully added to your 