1. Home
  2. Glossary
  3. Free cash flow yield

Free cash flow yield

German: Free-Cashflow-Rendite

Free cash flow divided by market value – how much cash a company generates relative to its price.

A free cash flow yield of 6% means the company generates 6% of its market value each year as freely available cash. It’s harder to flatter than P/E but swings when investment is lumpy.