Earning per share, also called net income per share, is a market prospect ratio that measures the amount of net income earned per share of stock outstanding. In other words, this is the amount of money each share of stock would receive if all of the profits were distributed to the outstanding shares at the end of the year.
Earnings per share is also a calculation that shows how profitable a company is on a shareholder basis. So a larger company’s profits per share can be compared to smaller company’s profits per share. Obviously, this calculation is heavily influenced on how many shares are outstanding. Thus, a larger company will have to split its earning amongst many more shares of stock compared to a smaller company.
Earnings per share or basic earnings per share is calculated by subtracting preferred dividends from net income and dividing by the weighted average common shares outstanding.
Although many investors don’t pay much attention to the EPS, a higher earnings per share ratio often makes the stock price of a company rise. Since so many things can manipulate this ratio, investors tend to look at it but don’t let it influence their decisions drastically.
Analysts gives Capital One Financial Corp. (NYSE:COF) a mean recommendation of 2.10. The company has declined -0.22% in past 3 months. The stock has earnings growth of 2.10% yoy and showed a high EPS growth of 50.60% over the past five years. Shares are trading -4.80% below their 50-day moving average, and -7.91% below their 200-day moving average.
Discover Financial Services (NYSE:DFS) was trading -16.32% below its 52-week high and +9.65% above its 52-week low. Its last 5-Year EPS growth stands at 32.10% with earnings growth of 0.70% yoy. The stock has a 1-year performance down -15.35% and a positive weekly performance at 1.65%. The company is set at a mean analysts’ recommendation of 1.70.
Ericsson (ADR) (NASDAQ:ERIC) shares are trading -24.23% below the 52-week high and has displayed a high EPS growth of 26.40% in last 5 years. The 1 year EPS growth rate is -4.50%. Its share price has surged 3.04% in three months and is up 7.21% for the last five trades. The average analysts gave this company a mean recommendation of 2.40.