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Earnings Yield
Trailing earnings divided by price — the inverse of the P/E ratio.
Formula
1 ÷ trailing P/E ratio
Interpretation
A classic value signal: a higher earnings yield means more earnings per dollar of price paid.
What good looks like
High earnings yield (low P/E) relative to the reference level.
What bad looks like
Low or negative earnings yield (high or negative P/E).
Typical range
Roughly 0%–8% for most large caps, centered against a reference level.
Limitations
Trailing earnings can be distorted by one-off items, and earnings yield alone doesn't capture growth — a cheap stock can be cheap for a structural reason, not a temporary mispricing.
How OmniSignal uses it
One of the most extensively studied value factors in the academic literature.
Where it enters the score
Fundamental family
References
Basu (1977), "Investment Performance of Common Stocks in Relation to Their P/E Ratios" · Fama & French (1992), "The Cross-Section of Expected Stock Returns"
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