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Bed Bath & Beyond Inc  (NAS:BBBY) Earnings Yield (Joel Greenblatt) %: 19.23% (As of Aug. 2017)

Bed Bath & Beyond Inc's Enterprise Value for the quarter that ended in Aug. 2017 was $4,980 Mil. Bed Bath & Beyond Inc's EBIT for the trailing twelve months (TTM) ended in Aug. 2017 was $957 Mil. Bed Bath & Beyond Inc's Earnings Yield (Joel Greenblatt) for the quarter that ended in Aug. 2017 was 19.23%.

NAS:BBBY' s Earnings Yield (Joel Greenblatt) % Range Over the Past 10 Years
Min: 7.9   Max: 25.4
Current: 23.68

7.9
25.4

During the past 13 years, the highest Earnings Yield (Joel Greenblatt) of Bed Bath & Beyond Inc was 25.40%. The lowest was 7.90%. And the median was 11.70%.

NAS:BBBY's Earnings Yield (Joel Greenblatt) % is ranked higher than
95% of the 975 Companies
in the Global industry.

( Industry Median: 5.04 vs. NAS:BBBY: 23.68 )

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 (Yacktman) %. Bed Bath & Beyond Inc's Forward Rate of Return (Yacktman) % for the quarter that ended in Aug. 2017 was 20.21%. 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.


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Bed Bath & Beyond Inc Annual Data

Feb08 Feb09 Feb10 Feb11 Feb12 Feb13 Feb14 Feb15 Feb16 Feb17
Earnings Yield (Joel Greenblatt) % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 14.18 12.35 11.49 16.84 16.42

Bed Bath & Beyond Inc Quarterly Data

Nov12 Feb13 May13 Aug13 Nov13 Feb14 May14 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Feb17 May17 Aug17
Earnings Yield (Joel Greenblatt) % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 16.13 15.53 16.42 17.89 19.23

Competitive Comparison
* 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.


Calculation

In his book, The Little That Beat the Market, hedge fund manager Joel Greenblatt defines Earnings Yield as operating income divided by enterprise value.

Bed Bath & Beyond Incs Earnings Yield (Joel Greenblatt) for the fiscal year that ended in Feb. 2017 is calculated as

Earnings Yield (Joel Greenblatt)=EBIT/Enterprise Value
=1135.21/6912.582
=16.42 %

Bed Bath & Beyond Inc's Earnings Yield (Joel Greenblatt) for the quarter that ended in Aug. 2017 is calculated as

Earnings Yield (Joel Greenblatt)=EBIT (TTM)/Enterprise Value
=957.069/4,980
=19.22 %

Bed Bath & Beyond Inc's EBIT for the trailing twelve months (TTM) ended in Aug. 2017 was 211.283 (Nov. 2016 ) + 429.928 (Feb. 2017 ) + 147.011 (May. 2017 ) + 168.847 (Aug. 2017 ) = $957 Mil.



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 (Yacktman) % based on Don Yacktman's definition is a better measure of the expected rate of return for a stock.


Related Terms


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- Seekingalpha 2017-11-22 13:59:45

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