Consensus earnings estimates are not always accurate but play a key role in determining the appropriate valuation for a stock. Majority of traders and investors rely on consensus earnings estimates to plan out their investments with key focus on company’s earnings power. To make a proper assessment, investors seek a sound estimate of this year’s and next year’s earnings per share (EPS), as well as a strong sense of how much the company will earn even farther down the road.
Apple Inc. (NASDAQ: AAPL) currently has a diluted EPS of 8.55 for the trailing 12 months with EPS change of -9.90% this year. EPS growth for next year is estimated at 19.37%. The company’s quarterly earnings change (yoy) is 10.40%. Compared to annual sales growth for past 5 years of 14.80%, the company’s current sales growth quarter over quarter is 4.60%.
Another important parameter to look for when investing in any stock is the dividend yield. Dividend yield helps determine the cash flow you are getting for each dollar invested in an equity position. For stock novices, it’s a measures how much “bang for your buck” you are getting from dividends. In the absence of any capital gains, the dividend yield is effectively the return on investment for a stock. Apple Inc. (NASDAQ:AAPL) currently has a dividend yield of 1.65%.
NASDAQ: AAPL currently has a P/E ratio of 17.86. It’s simply an estimate of the dollar amount an investor can expect to invest in a company in order to receive one dollar of that company’s earnings or how much investors are willing to pay per dollar of earnings. Analyst are estimating the forward P/E of NASDAQ: AAPL to be around 14.37.
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