Firms do not always distribute all (or any) of the profit that they make amongst their shareholders. This means that even if the earnings per share are a good sum, it doesn't’t mean that the shareholders actually earned this amount for each of their shares. Similarly there are no guarantees that an investor will make the amount of money indicated by the earnings ratio calculation.
How Does the Dividend Yield Differ From Earnings Per Share/Earnings Ratio?
Dividend yield is different to earnings per share and earnings ratio because it takes dividends (the profit that the business has given to shareholders) into account. Dividend yield compares the market price of the share against the dividend paid out by the business.
Calculating Dividend Yield
To calculate the dividend yield you will need to find out the value of the ordinary share dividend and the ordinary share market price. Once you have these figures divide the ordinary share dividend by the ordinary and multiply the answer by 100%.