A Brief Note on Earnings Yields

I debated briefly (between my ears) how to present this data.  I settled on this method, because if you want to play with it you can do so without too much trouble.

Here are the earnings yields, dividend yields, and payout ratios (what percentage of trailing 12-month earnings have been paid out as dividends) by industry and sector:

IndustryE YieldD YieldPayout %
0124 – Metal Mining

18.24%

3.49%

19%

0606 – Oil & Gas – Integrated

13.40%

3.76%

28%

0412 – Auto & Truck Manufacturers

12.61%

1.69%

13%

0709 – Insurance (Life)

11.73%

2.44%

21%

0215 – Construction Services

11.71%

1.83%

16%

0603 – Coal

11.33%

2.89%

25%

0121 – Iron & Steel

10.41%

2.49%

24%

0957 – Retail (Grocery)

10.36%

3.00%

29%

1209 – Water Utilities

9.77%

3.51%

36%

0512 – Fish/Livestock

9.40%

1.74%

18%

0915 – Communications Services

9.03%

4.72%

52%

0706 – Insurance (Accident & Health)

8.98%

1.22%

14%

0609 – Oil & Gas Operations

8.94%

2.06%

23%

0727 – Regional Banks

8.94%

2.85%

32%

0518 – Office Supplies

8.30%

2.47%

30%

0203 – Aerospace and Defense

8.00%

2.12%

26%

0415 – Auto & Truck Parts

8.00%

1.41%

18%

0969 – Schools

7.84%

0.56%

7%

0809 – Major Drugs

7.77%

3.92%

50%

0103 – Chemical Manufacturing

7.74%

2.16%

28%

1103 – Air Courier

7.43%

2.17%

29%

0106 – Chemicals – Plastics and Rubbers

7.36%

2.12%

29%

0524 – Tobacco

7.30%

3.94%

54%

0130 – Non-Metallic Mining

7.28%

0.48%

7%

0206 – Construction & Agricultural Machinery

7.17%

1.62%

23%

0724 – Money Center Banks

7.16%

2.38%

33%

0903 – Advertising

7.00%

1.57%

22%

0218 – Misc. Capital Goods

6.92%

1.76%

25%

0403 – Apparel/Accessories

6.91%

1.41%

20%

1112 – Railroads

6.90%

1.74%

25%

0436 – Tires

6.81%

1.00%

15%

0406 – Appliances & Tools

6.71%

1.90%

28%

0509 – Crops

6.65%

0.62%

9%

0924 – Personal Services

6.61%

1.72%

26%

1006 – Computer Hardware

6.60%

0.28%

4%

0954 – Retail (Drugs)

6.45%

1.13%

17%

1203 – Electric Utilities

6.32%

3.83%

61%

0127 – Misc. Fabricated Products

6.18%

1.86%

30%

1024 – Electronic Instruments & Controls

6.01%

2.08%

35%

0503 – Beverages (Alcoholic)

5.88%

2.34%

40%

0906 – Broadcasting & Cable TV

5.75%

1.50%

26%

0109 – Containters & Packaging

5.67%

2.17%

38%

0806 – Healthcare Facilities

5.58%

0.26%

5%

1106 – Airline

5.52%

0.33%

6%

0715 – Insurance (Property & Casualty)

5.51%

1.71%

31%

1003 – Communications Equipment

5.49%

1.46%

27%

0963 – Retail (Specialty Non-Apparel)

5.49%

0.70%

13%

0506 – Beverages (Non-Alcoholic)

5.47%

2.41%

44%

0515 – Food Processing

5.46%

2.23%

41%

0912 – Casinos & Gaming

5.43%

0.88%

16%

1015 – Computer Peripherals

5.31%

2.32%

44%

0927 – Printing & Publishing

5.21%

2.21%

42%

0951 – Retail (Department & Discount)

5.20%

1.76%

34%

1027 – Office Equipment

5.09%

2.89%

57%

0942 – Restaurants

5.09%

2.02%

40%

0430 – Recreational Products

5.07%

1.57%

31%

1030 – Scientific & Technical Instruments

5.07%

1.27%

25%

0712 – Insurance (Miscellaneous)

5.04%

1.90%

38%

0118 – Gold & Silver

5.03%

1.78%

35%

0939 – Rental & Leasing

4.96%

0.73%

15%

0521 – Personal & Household Products

4.95%

2.64%

53%

1021 – Computer Storage Devices

4.80%

0.22%

5%

1036 – Software & Programming

4.76%

0.96%

20%

0960 – Retail (Home Improvement)

4.73%

1.89%

40%

0418 – Footwear

4.66%

1.09%

23%

0612 – Oil Well Services & Equipment

4.64%

1.64%

35%

0421 – Furniture & Fixtures

4.64%

1.70%

37%

0945 – Retail (Apparel)

4.58%

1.17%

26%

0921 – Motion Pictures

4.58%

0.82%

18%

0209 – Construction – Supplies and Fixtures

4.56%

2.02%

44%

0812 – Medical Equipment & Supplies

4.48%

1.25%

28%

0909 – Business Services

4.47%

1.23%

28%

0803 – Biotechnology & Drugs

4.45%

2.39%

54%

0936 – Recreational Activities

4.45%

2.36%

53%

0303 – Conglomerates

4.29%

1.33%

31%

0918 – Hotels & Motels

4.21%

0.93%

22%

0133 – Paper & Paper Products

4.03%

2.63%

65%

0424 – Jewelry & Silverware

4.03%

0.04%

1%

1109 – Misc. Transportation

3.99%

1.27%

32%

1206 – Natural Gas Utilities

3.87%

3.81%

99%

1018 – Computer Services

3.85%

0.66%

17%

0718 – Investment Services

3.77%

1.84%

49%

0730 – S&Ls/Savings Banks

3.39%

1.93%

57%

0933 – Real Estate Operations

3.00%

3.89%

129%

1033 – Semiconductors

2.81%

1.86%

66%

0112 – Fabricated Plastic & Rubber

2.59%

1.42%

55%

0948 – Retail (Catalog & Mail Order)

2.56%

0.01%

0%

0433 – Textiles – Non-Apparel

2.56%

0.09%

3%

0975 – Waste Management Services

2.55%

2.63%

103%

1115 – Trucking

2.34%

0.61%

26%

0115 – Forestry & Wood Products

2.03%

2.48%

122%

0212 – Construction – Raw Materials

1.62%

1.55%

95%

0427 – Photography

1.00%

0.26%

26%

0221 – Mobile Homes & RVs

0.72%

1.64%

228%

1012 – Computer Networks

-0.57%

0.28%

-48%

0703 – Consumer Financial Services

-3.68%

1.96%

-53%

0972 – Security Systems & Services

-5.04%

1.17%

-23%

0930 – Printing Services

-5.06%

3.58%

-71%

1118 – Water Transportation

-7.14%

3.28%

-46%

0966 – Retail (Technology)

-9.39%

2.52%

-27%

0409 – Audio & Video Equipment

-24.98%

1.32%

-5%

 

SectorE YieldD YieldPayout %
01 – Basic Materials

11.29%

2.62%

23%

06 – Energy

10.46%

2.79%

27%

04 – Consumer Cyclical

8.00%

1.53%

19%

02 – Capital Goods

7.52%

1.86%

25%

Grand Average

6.97%

2.34%

34%

07 – Financial

6.34%

2.28%

36%

09 – Services

6.34%

2.79%

44%

05 – Consumer Non-Cyclical

5.80%

2.64%

46%

12 – Utilities

5.62%

3.82%

68%

08 – Health Care

5.39%

2.49%

46%

11 – Transportation

5.17%

1.62%

31%

10 – Technology

4.82%

1.12%

23%

03 – Conglomerates

4.29%

1.33%

31%

Now, remember that the earnings yields here are backward-looking.  To give you an example, property-casualty insurers and reinsurers lost a lot over the last 12 months, but still managed to have P/E ratios of around 18 (5.5% earnings yield).  When you look at these tables, ask yourself how good current prospects might be relative to the last 12 months.

Also remember that cyclical companies tend to have low valuations before their sales slump.  As sectors go, I think Energy has a lot to commend it in this environment.  Could have a lot of upside, and not much downside.

The tables above cover the whole market, 8800+ companies weighted by their market capitalizations.  I could do a second version to these tables for a subset of the markets, forward-looking, which used the earnings estimates of the sell-side.  I suspect that would cover the larger half of the companies, and roughly 99% of the total market cap.  Let me know if you would like that, it wouldn’t be that hard to do.

PS — Note that everything here is in line with the terms of my data license, because every number here is one that I calculated.  I try to follow that rule in things that I publish, aside from well-known and limited bits of data.

3 Comments

  • Conscience of a Conservative says:

    Interesting to see pay-out ratios of Drugs and Tobacco so similar to Utilities. The latter doesn’t surprise me as this industry should operate as a liquidating trust and pay out its profits considering lack of opportunity to invest and a dying client, but “drugs”? I guess when you regulate approval and regulate pricing you have a “utility”. No wonder drug companies are committing less of their resources to R&D each year.

  • MaryWilbur says:

    Please do a subset of these tables, for a subset of the markets forward-looking, which used the earnings estimates of the sell side. I would be very interested in seeing them. The past is interesting but it doesn’t usually predict the future.

    Thank you for your hard work.

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