Investopedia

Continue to Site »

Look-Through Earnings

Filed Under » , , , ,
Dictionary Says

Definition of 'Look-Through Earnings'

Look-through earnings include the profits that a company pays to its shareholders in the form of dividends and the retained earnings that the company uses to expand its operations. This concept was popularized by Warren Buffet to analyze the overall earnings-generating capabilities of the firm. The idea is that all of these profits have value to investors - the dividends provide an immediate benefit, while the retained earnings should increase the stock's value in the future.
Investopedia Says

Investopedia explains 'Look-Through Earnings'

The investor should consider all of these profits - the look-through earnings - in assessing the value of a stock. Look-through earnings also account for the taxes that would have been paid if the retained earnings had been distributed as dividends.

Articles Of Interest

  1.

    What Is Warren Buffett's Investing Style?

    Learn the main principles that Warren Buffet uses in assessing a company. His take on value investing may surprise you.

  2. Warren Buffett's Bear Market Maneuvers

    This esteemed investor rarely changes his long-term investing strategy, no matter what the market does.

  3. Warren Buffett: How He Does It

    We look at the Sage of Omaha's methodology for evaluating value stocks.

  4. Warren Buffett: The Road To Riches

    Find out how he went from selling soft drinks to buying up companies and making billions of dollars.

  5. Why Warren Buffett Envies You

    The Oracle of Omaha can move over - there's a new investor in town.

  6. Warren Buffett's Best Buys

    The Oracle of Omaha's "Rip van Winkle" approach has served him well. Read on to learn more.

  7. Stop Keeping Up With The Joneses - They're Broke

    Conspicuous consumption could be robbing you of future wealth.

  8. Depreciation: Straight-Line Vs. Double-Declining Methods

    Appreciate the different methods used to describe how book value is "used up".

  9. Women: Invest In Your Financial Literacy

    Learning about money may seem intimidating, but it's not as hard as it looks.

  10. What Buffett Would Say To The 50K’ers

    FOX Business Network's Liz Claman will interview Berkshire Hathaway CEO Warren Buffett in an exclusive sit-down on Monday May 6th at 9:30 a.m. following the Berkshire Hathaway shareholder meeting. ...
comments powered by Disqus
Marketplace
Hot Definitions

  1. Winner's Curse

    Because of incomplete information, emotions or any other number of factors regarding the item being auctioned, bidders can have a difficult time determining the item's intrinsic value. As a result, the largest overestimation of an item's value ends up winning the auction.

  2. Glocalization

    A combination of the words "globalization" and "localization" used to describe a product or service that is developed and distributed globally, but is also fashioned to accommodate the user or consumer in a local market.

  3. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  4. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  5. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  6. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.
Trading Center