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) %. Piedmont Natural Gas Co's Forward Rate of Return (Yacktman) % for the quarter that ended in Jul. 2016 was 0.84%. 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.
Piedmont Natural Gas Co Earnings Yield % Calculation
Earnings yield is the reciprocal of the P/E Ratio.
Piedmont Natural Gas Co's Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Jul. 2016 adds up the quarterly data reported by the company within the most recent 12 months, which was $1.720 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:
The earnings in the calculation is the Trailing Twelve Months earnings.
Piedmont Natural Gas Co (NYSE:PNY) 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.
Piedmont Natural Gas Co Earnings Yield % Related Terms
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Piedmont Natural Gas Co (Piedmont Natural Gas Co) Business Description
Piedmont Natural Gas Co Inc was incorporated in New York in 1950 and began operations in 1951. In 1994, it merged into a newly formed North Carolina corporation with the same name for the purpose of changing its state of incorporation to North Carolina. The Company is an energy services company whose business is distribution of natural gas to residential, commercial, industrial and power generation clients in portions of North Carolina, South Carolina and Tennessee, including customers served by municipalities who are its wholesale customers. The Company is invested in joint venture, energy-related businesses, including unregulated retail natural gas marketing, regulated interstate natural gas transportation and storage and regulated intrastate natural gas transportation. It provides service from resource centers in Anderson, Greenville and Spartanburg in South Carolina and Charlotte, Salisbury, Greensboro, Winston-Salem, High Point, Burlington, Hickory, Indian Trail, Spruce Pine, Reidsville, Fayetteville, New Bern, Wilmington, Tarboro, Elizabeth City, Rockingham and Goldsboro in North Carolina. In North Carolina, it also provides natural gas service to Greenville, Rocky Mount and Wilson. In Tennessee, its service area is the metropolitan area of Nashville, including wholesale natural gas service to Gallatin and Smyrna. The Company has three reportable business segments, regulated utility, regulated non-utility activities and unregulated non-utility activities. The regulated utility segment includes operating a safe and reliable natural gas distribution system and the ability to recover the costs and expenses of the business in the rates charged to customers. The regulated non-utility activities segment consists of equity method investments in regulated energy-related joint ventures that are held by the Company's wholly-owned subsidiaries. The unregulated non-utility activities segment consists of its equity method investment in an unregulated energy-related joint venture that is held by a wholly-owned subsidiary. The regulated utility competes with other energy products, such as electricity and propane, in the residential and commercial customer markets. Natural gas for power generation competes with other fuel sources for the generation of electricity, including coal, nuclear and renewable resources. Additionally, as with industrial customers, the Company competes with other pipeline providers to serve the power generation plants.
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