Definition
Expected earnings divided by price — the P/E ratio inverted and expressed as a percentage.
It carries exactly the same information as the P/E and is easier to read in two places. First, it stays finite: as expected earnings approach zero the P/E runs away to infinity and a chart of it becomes unreadable, while the earnings yield simply approaches zero. Second, it is denominated like a bond yield, so it can be set directly against a 10-year Treasury — the difference between the two is the equity risk premium in its crudest form. What it is not is a cash flow: an index does not pay out its earnings, so a 5% earnings yield is not 5% in hand. Both readings are shown for every series at /valuation, which computes the yield as the exact reciprocal of the multiple.