What Is Free Cash Flow Yield and Why Does It Matter?
Free cash flow yield is a company's free cash flow divided by its market value, shown as a percentage. It tells you how much cash the business generates each year for every $100 of stock you would own, after it has paid for the equipment it needs to keep running.
On this site's data the median across 365 stocks is about 4.6%, and it matters because cash is harder to dress up than reported profit. As of October 24, 2026, Comcast shows 21.2% and Amazon 0.6%, which is the whole story of why you read it next to earnings yield.
How is free cash flow yield calculated?
Free cash flow is cash from operations minus capital spending. Divide it by the market value (or, per share, by the share price) and you have the yield. It is the inverse of the price to free cash flow multiple: a stock at 20 times free cash flow yields 5%.
This site gets free cash flow per share from the price and the Price/FCF (TTM) figure in its data feed, so every yield below is trailing twelve months, not a forecast. See free cash flow and FCF yield in the glossary.
How does free cash flow yield differ from earnings yield?
Earnings yield is net income divided by market value, which is the P/E ratio turned upside down. A P/E of 25 is an earnings yield of 4%. The cash version swaps net income for free cash flow, so the two split whenever profit and cash move apart.
| Why they differ | FCF yield vs earnings yield |
|---|---|
| Heavy capital spending | FCF yield is lower, because capex comes off cash flow at once but reaches profit slowly as depreciation |
| Large non-cash charges | FCF yield is higher, because write-downs and depreciation cut profit but not cash |
| Stock-based pay | FCF yield is higher, because the cost is not paid in cash (see stock-based compensation) |
| Working capital swings | FCF yield moves either way as inventory and receivables build or release |
Neither is the truth. The gap is the clue: a large one means you need to find out which of these rows explains it.
Trailing free cash flow yield (purple) and earnings yield (amber) as of October 24, 2026. Earnings yield is 1 divided by the trailing P/E in the screener data.
Amazon and Alphabet sit on the capex side: each spends heavily on data centers, so cash flow trails profit. Comcast and AT&T sit on the other side, where depreciation and other non-cash charges hold profit below cash. Coca-Cola, a steady business with modest capex, shows the same 3.5% on both.
What is a typical free cash flow yield?
Among the 365 stocks in this site's data where the measure fits and free cash flow is positive, the middle one yields about 4.6%. The middle earnings yield, across the 341 with a positive trailing P/E, is about 3.9%. Cash flow is the more generous of the two for the typical company, and 229 of those 341 stocks show a higher FCF yield than earnings yield.
| FCF yield | Stocks | Share of 365 |
|---|---|---|
| Under 2% | 42 | 12% |
| 2% to 4% | 110 | 30% |
| 4% to 6% | 97 | 27% |
| 6% to 8% | 54 | 15% |
| 8% or more | 62 | 17% |
A high yield is not a safe one. The top of the ranking has an oil producer at 26.6% and a cable company at 21.2%, and a yield that high can mean the cash flow is about to fall or the price already fell. Run the value trap check before reading it as cheap.
What is the difference between levered and unlevered free cash flow?
Levered free cash flow is what remains after the company pays interest on its debt, so it belongs to shareholders and pairs with market value. That is the yield on this site: cash from operations (already after interest) minus capex, over market value.
Unlevered free cash flow adds the interest back, so it belongs to all capital providers and pairs with enterprise value (market value plus debt minus cash). Mixing them, such as dividing unlevered cash flow by market value, flatters a company with a lot of debt. The enterprise-value version is covered in what is EV/EBITDA.
Why are banks, insurers and REITs left out?
For a bank or insurer, operating cash flow swings with loans, trading assets and premiums that arrive before claims are paid. The result is a yield like 43% for State Street, which is not profit left for owners. The full explanation is in why bank and insurer free cash flow yields mislead.
The FCF yield screener and the DCF drop banking, insurance, financial services, real estate and utilities, which is 137 of the 502 stocks in the data, because a per-share cash yield does not fit how they report. See excluded sectors.
Free cash flow yield FAQ
What is a good free cash flow yield?
There is no fixed line. Across the 365 stocks on this site that the measure fits, the median is about 4.6%, so anything well above that is cheap on cash flow and anything below 2% is expensive on it. Check why the cash flow is high or low before reading either as a signal.
Is free cash flow yield the same as earnings yield?
No. Earnings yield is net income divided by market value (the inverse of the P/E ratio). Free cash flow yield uses cash from operations minus capital spending, so the two split apart when a company spends heavily on capex or books large non-cash charges.
Can free cash flow yield be negative?
Yes, when a company spends more than its operations bring in. This site's FCF yield ranking leaves those stocks out rather than showing a negative number.
Why does the screener leave out banks and insurers?
Their operating cash flow includes swings in loans, trading assets and premiums received before claims are paid, so the yield does not measure profit left for owners. The same rule drops real estate and utilities, 137 of 502 stocks in all.
What is the difference between levered and unlevered free cash flow?
Levered free cash flow is what is left after interest on debt and is paired with market value. Unlevered free cash flow ignores interest and is paired with enterprise value, which adds debt and subtracts cash.
This is educational analysis, not investment advice. Figures are trailing twelve months from the site's data feed as of October 24, 2026.