What does earnings yield mean?

The company's annual profit as a percentage of its market price — the flip side of the P/E.

How do you interpret earnings yield?

Higher means more earnings per dollar invested. Easy to compare directly against bond yields to judge the relative attractiveness of equity.

How does earnings yield compare across companies?

Comparable across profitable companies and against fixed-income yields; undefined when earnings are negative.

Constellation Brands STZ Earnings yield

Earnings yield at other companies

Keurig Dr PepperKDP

5.1%+1.6pp

PepsiCoPEP

4.1%-0.4pp

Monster BeverageMNST

2.9%+0.2pp

Coca-ColaKO

4.2%+0.7pp

StarbucksSBUX

1.5%-1.3pp

Other financials

Income statement

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Revenue$1.9B-11.3%

Gross profit$951.7M-14.6%

Operating income$441.6M—

Net income$201.8M+154%

Balance sheet

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Cash & equivalents$102.4M+50.4%

Total debt$10.6B-1.0%

Total equity$8.1B+17.4%

Total assets$21.9B+1.2%

Cash flow

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Operating cash flow$562.8M-5.4%

CapEx$218.9M-22.5%

Free cash flow$343.9M+10.2%

Valuation

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Market cap$24.21B—

Enterprise value$34.72B—

P/E14.4×—

P/S2.7×—

Profitability

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Gross margin51.6%-0.5pp

Operating margin29.8%—

Net margin18.5%+17.7pp

Returns & leverage

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Return on equity22.5%+21.6pp

Debt / equity1.3×-0.2×

Current ratio1.1×+0.2×

Questions, answered.

What does earnings yield mean?: The company's annual profit as a percentage of its market price — the flip side of the P/E.
How do you interpret earnings yield?: Higher means more earnings per dollar invested. Easy to compare directly against bond yields to judge the relative attractiveness of equity.
How does earnings yield compare across companies?: Comparable across profitable companies and against fixed-income yields; undefined when earnings are negative.