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The Estee Lauder (MEX:EL) Forward Rate of Return (Yacktman) % : 0.20% (As of Mar. 2024)


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What is The Estee Lauder Forward Rate of Return (Yacktman) %?

Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. The Estee Lauder's forward rate of return for was 0.20%.

The historical rank and industry rank for The Estee Lauder's Forward Rate of Return (Yacktman) % or its related term are showing as below:

MEX:EL' s Forward Rate of Return (Yacktman) % Range Over the Past 10 Years
Min: 0.3   Med: 11   Max: 20.84
Current: 1.3

During the past 13 years, The Estee Lauder's highest Forward Rate of Return was 20.84. The lowest was 0.30. And the median was 11.00.

MEX:EL's Forward Rate of Return (Yacktman) % is ranked worse than
65.55% of 1286 companies
in the Consumer Packaged Goods industry
Industry Median: 8.14 vs MEX:EL: 1.30

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.


The Estee Lauder Forward Rate of Return (Yacktman) % Historical Data

The historical data trend for The Estee Lauder'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.

The Estee Lauder Forward Rate of Return (Yacktman) % Chart

The Estee Lauder Annual Data
Trend Jun14 Jun15 Jun16 Jun17 Jun18 Jun19 Jun20 Jun21 Jun22 Jun23
Forward Rate of Return (Yacktman) %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 10.66 10.38 7.03 13.47 7.03

The Estee Lauder Quarterly Data
Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24
Forward Rate of Return (Yacktman) % Get a 7-Day Free Trial 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 9.18 7.03 4.19 2.13 0.20

Competitive Comparison of The Estee Lauder's Forward Rate of Return (Yacktman) %

For the Household & Personal Products subindustry, The Estee Lauder'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.


The Estee Lauder's Forward Rate of Return (Yacktman) % Distribution in the Consumer Packaged Goods Industry

For the Consumer Packaged Goods industry and Consumer Defensive sector, The Estee Lauder's Forward Rate of Return (Yacktman) % distribution charts can be found below:

* The bar in red indicates where The Estee Lauder's Forward Rate of Return (Yacktman) % falls into.



The Estee Lauder 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).

The Estee Lauder's Forward Rate of Return of Mar. 2024 is

Forward Rate of Return=Normalized Free Cash Flow/Price+5-Year EBITDA Growth Rate
=71.08857143/2375.03+-0.0344
=-0.45 %

* 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.


The Estee Lauder  (MEX:EL) 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.


The Estee Lauder Forward Rate of Return (Yacktman) % Related Terms

Thank you for viewing the detailed overview of The Estee Lauder's Forward Rate of Return (Yacktman) % provided by GuruFocus.com. Please click on the following links to see related term pages.


The Estee Lauder (MEX:EL) Business Description

Address
767 Fifth Avenue, New York, NY, USA, 10153
Estee Lauder is a leader in the global prestige beauty market, participating across skin care (56% of 2022 sales), makeup (26%), fragrance (14%), and hair care (4%) categories, with top-selling brands such as Estee Lauder, Clinique, M.A.C, La Mer, Jo Malone London, Aveda, Bobbi Brown, and Origins. The firm operates in more than 150 countries, generating 26% of revenue from the Americas, 43% from Europe, the Middle East and Africa (including travel retail), and 31% from Asia Pacific. Estee Lauder sells its products through department stores, travel retail, specialty multibrand beauty stores, brand-dedicated freestanding stores, e-commerce, salons/spas, and perfumeries.