The earnings per share ratio (EPS ratio) measures the amount of a company’s net income that is theoretically available for payment to the holders of its common stock. A company with a high earnings per share ratio is capable of generating a significant dividend for investors, or it may plow the funds back into its business for more growth; in either case, a high ratio indicates a potentially worthwhile investment, depending on the market price of the stock.
If an investor is primarily interested in a steady source of income, the EPS ratio is useful for estimating the amount of room that a company has for increasing its existing dividend amount. However, in many cases simply reviewing a company’s history of making changes to its dividend is a better indicator of the actual size of future dividends. In some cases, a company may have a high ratio, but pays no dividend at all, since it prefers to plow the cash back into the business to fund additional growth.
It is very worthwhile to track a company’s earnings per share ratio on a trend line. If the trend is positive, then the company is either generating an increasing amount of earnings or buying back its stock. Conversely, a declining trend can signal to investors that a company is in trouble, which can lead to a decline in the stock price.
Analysts gives Hanesbrands Inc. (NYSE:HBI) a mean recommendation of 1.90. The company has declined -1.01% in past 3 months. The stock has earnings growth of 37.90% yoy and showed a high EPS growth of 50.10% over the past five years. Shares are trading -3.99% below their 50-day moving average, and -7.42% below their 200-day moving average.
U.S. Bancorp (NYSE:USB) was trading -5.56% below its 52-week high and +12.57% above its 52-week low. Its last 5-Year EPS growth stands at 26.00% with earnings growth of 3.80% yoy. The stock has a 1-year performance down -2.89% and a negative weekly performance at -0.94%. The company is set at a mean analysts’ recommendation of 2.60.
CBRE Group Inc (NYSE:CBG) shares are trading -12.65% below the 52-week high and has displayed a high EPS growth of 64.60% in last 5 years. The 1 year EPS growth rate is 66.70%. Its share price has surged 6.70% in three months and is up 64.60% for the last five trades. The average analysts gave this company a mean recommendation of 1.70.