DEFINITION of 'Free Cash Flow Yield'
An overall return evaluation ratio of a stock, which standardizes the free cash flow per share a company is expected to earn against its market price per share. The ratio is calculated by taking the free cash flow per share divided by the share price. To illustrate:
INVESTOPEDIA EXPLAINS 'Free Cash Flow Yield'
Free cash flow yield is similar in nature to the earnings yield metric, which is usually meant to measure GAAP earnings per share divided by share price. Generally, the lower the ratio, the less attractive the investment is and vice versa. The logic behind this is that investors would like to pay as little price as possible for as many earnings as possible.
Some investors regard free cash flow (which takes into account capital expenditures and other ongoing costs a business incurs to keep itself running) as a more accurate representation of the returns shareholders receive from owning a business, and thus prefer to free cash flow yield as a valuation metric over earnings yield.

Earnings Per Share  EPS
The portion of a company's profit allocated to each outstanding ... 
Free Cash Flow To Sales
A ratio that illustrates the percentage of free cash flow to ... 
Free Cash Flow To Equity  FCFE
This is a measure of how much cash can be paid to the equity ... 
Earnings Yield
The earnings per share for the most recent 12month period divided ... 
Cash Flow Per Share
A measure of a firm's financial strength, calculated as: Cash ... 
Cash Flow Return on Investment ...
A valuation model that assumes the stock market sets prices based ...

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