What Is EPS In Stocks? | Earnings Per Share Explained

What does EPS mean? The earnings per share ratio is a very common investing metric! I explain what it is, how it can change and why investors use earnings per share often! EPS is an important metric that allows investors to understand what cut of the profits they are paying for.
This video will cover the basics of earnings per share for beginners in the stock market! You will learn what EPS means and how you can use it to your advantage while investing. Earnings per share can be effected both positively and negatively. Profits will impact it, and so will share dilution, and share buybacks.
Check out my #Shorts video on EPS here! • #Shorts | Earnings Per...
The video is part of the Stock Market Basics playlist.
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Disclaimer
This channel is for entertainment purposes only and is not investment advice. All videos published on this channel are informational in nature and are not intended to give advice or recommendations about any particular security or investment. Before making any investment decisions, I would recommend you to speak to a financial professional that is qualified to provide advice.

[@ErinandEmmaFinance]

we think that these whiteboard animations are super cool and keep the audience attached

[@Rynance]

Great! Thanks for stopping by!

[@fingerstylefan]

I learned and understand more from this video than the last 4-5 videos I watched combined. Thank you!

[@vincentbeaubien9358]

same!

[@chloejarvis721]

My good sir, thank you so ver ver much. I was so bloody confused with what the exact importance of EPS was, and this really helped. Thanks my guy!

[@mahimareddy9220]

This is an amazing video. I've been trying to understand EPS for a while now and this video cleared all my doubts.

[@UsefulDonkey99]

Thank you for this video!

[@ZhuojunJiang-uh6vr]

Thank you! Easy and clear

[@ZizaGordan]

I returned back and back to your videos when I am not sure about some stock valuations :) You are doing a great job, keep on doing. Btw EPS is one of the most important metrics I pay attention to when buying/selling a stock. Thanks !

[@FernandoWillyAlvarado]

I understand it now thanks for explaining it thoroughly.

[@ganapatihegde1024]

Great stock vlog! Very easy to understand.

[@gymmotivated7036]

Most clear and well-explained vidéo I have found.

[@la_uruguacha]

I love the video simple and easy to understand.....Thanks a lot bro!!!🥰🥰🙏🙏🙏

[@salmansaeed9278]

Very nicely explained. Thank you.

[@brothaj9959]

Thank you for making it clear & simple to understand, Subbed!

[@botsneako]

does eps mean how much your earn from one share ?

[@marcia178]

Great job! Your videos are the first succesfull step towards investments.

[@Rynance]

Thanks for watching! Have any questions? Drop a comment and I'll get back to you ASAP!

[@noelmsindo4980]

Thank you you make it easy to understand

[@ronaldhoward4215]

I watched a hundred video and still did not understand. This video was so understandable and so simple.❤❤❤❤❤ thank you

[@jakobafeworiki1006]

u are amzing that explaning brother thanks so much understood every point u made

[@user-nf8zg7ks2c]

very clear. Thank you.

[@rookieinvestor6377]

That was a great video. Well explained with those 2 examples. Great video, looking fwd for more videos

[@Rynance]

Much appreciated!

[@neilgary3471]

Good work man!

[@hubertharris6874]

Awsome Explanation. keep going

[@willjackson6202]

THANK YOUUUUUUU

[@brickinvesting]

Outstanding video! Liked!

[@Rynance]

Happy you enjoyed :)

[@user-bm2st1xf9u]

Great editing skills. I can learn a thing or two for my edits. I just started around a month ago! Cheers!

[@Rynance]

Thanks!

[@user-bm2st1xf9u]

I'll be supporting you! :)

[@Rynance]

I appreciate the support!

[@ChoogyNet]

Great tutorial. You will grow fast. All the best

[@Rynance]

Really appreciate the support! Thanks!

[@investingwithu]

Great video happy to support! Subbed!

[@Rynance]

Thanks!

[@MoneyOnlineSimple]

Another good explanation video my friend. I'm going to have to keep watching your vids and learn the investing basics. :)

[@Rynance]

I appreciate the kind words :)

[@MoneyOnlineSimple]

@@Rynance You are very welcome my friend. You are doing really well so far! :)

[@ganapatihegde1024]

I am a new subscriber to your channel. Greetings from Plano, Texas, United States. What are the other general parameters to buy a stock? Thanks!

[@jannesetsebeth4916]

Great communication skills, you should think about narrating books too 👍

[@petersdestiny3058]

thanks for explaining better. Do you have course on this?

[@MaryPatricia-wr3wj]

Well that would be impossible to do considering I'm in my late 50s and I'm more interested in investments that could set me up for retirement in my 60s, my goal is at least $2million.

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[@ryminvesting6554]

Here is sub No 13. Good educational video.

[@Rynance]

Awesome! Thanks for stopping by!

[@kevin11433able]

Good video

[@bikuful]

Pls explain all matrices..one should consider before buying a share

[@timothycardinal5934]

Great job :-)

[@danielmcpherson9062]

Amazing video! Quick question, when you say "outstanding shares", what do you mean? If a company "gives out" 100 shares to the stock market and 50 of those shares are bought, would the outstanding shares be 100 or 50?

[@TWAJW1234567890]

A company's outstanding shares are the total number of shares issued and actively held by stockholders-both individual investors and corporate insiders.

[@mahimareddy9220]

Is there any video on P/E Ratio?

[@michellizollar9927]

But even though the EPS for Bill's shop is higher, Cameron's carpet offers also Dividends for the investors. Would still Bill's shop a better "options"?

[@nooobest]

Great video

[@Rynance]

Thank you!

[@jesushernandez-eo8fq]

How do fundamentals play a role in the p/s? What about the current market which seems to be unfavorable for stocks? What about speculation?

[@Benje]

Great vid bro, some really key info people that a lot of people who invest don't know about, people will deffo find this valuable!

[@Rynance]

Thanks for stopping by!

[@coltenkerlek7944]

Do you get annual dividend payout by taking dividend % x market cap?

[@keysame2309]

Is higher eps more income for shareholders? Is level of eps changing share price? Eg higher eps more expensive for shares

[@yonasisrael7019]

About the dividends we are subtracting from net income, is it preferred dividends or total?

[@nylandsmann]

preferred, I wish you already found it 😬 watch?v=XnKDFQxoA3I&t=365s

[@royblckbrn]

@Rynance Is Bill's bike shop still good investment? Because in the example no dividend payout is shown. Whereas the carpet business does pay a dividend. Isn't that where the real advantage is?

[@kurdepyua8847]

What does he mean by outstanding ?

[@jbepic27]

Is the EPS paid to a individual or it's just an equity to the company's profit

[@plaz5451]

The first part of the statement is generally true: Earnings Per Share (EPS) is indeed a metric used to measure a company's profitability on a per-share basis. A higher EPS can indicate stronger profitability, which may be viewed positively by investors because it suggests that the company is generating more earnings for each share of its stock. However, the second part of the statement is not entirely accurate. The number of shares outstanding does not directly impact EPS in the way suggested. EPS is calculated by dividing a company's net income by its total number of outstanding shares. Therefore, the number of shares outstanding does not inherently lower EPS. If a company issues more shares (increasing the number of shares outstanding), it dilutes the ownership interest of existing shareholders. However, this doesn't necessarily mean that EPS will decrease. It depends on whether the newly issued shares contribute positively or negatively to the company's earnings. If the company uses the proceeds from issuing new shares to generate additional income, it may not necessarily reduce EPS. In summary, while a higher EPS can be viewed favorably by investors, the impact of changes in the number of shares outstanding on EPS is more nuanced and depends on various factors, including the reason for the change in shares outstanding and its impact on the company's overall profitability.

[@mikkyalmazol]

hi sorry for the dumb question, why would a company pays dividends if it affects their EPS?.. What does dividends do?..

[@fdadrtrttewrt]

Thank you for the video but i am confused why dividends are subtracted from net income. Is it because the dividends are paid out for preferred stock and not common stock?

[@Rynance]

Dividends are subtracted from net income because it is basically an expense the corporation pays from itself, out to the shareholders. Dividends take away from the company's total earnings because when dividends are paid to investors, it is money that is withdrawn from the company and does not count towards their net earnings. Side note, in most cases (but not all), dividends are paid to both common and preferred stock

[@winmonaye]

@@Rynance then it’s not going to be apple to apple if one company pay more dividends?? People would prefer stocks that return the dividend and has a higher EPS… Also, since it’s “per share”, even it has higher EPS, if the per share price is high, is it preferable to have lower share price but higher EPS?

[@jarrylwirth672]

Rynance, in your example you say that $1,000 invested in Bill’s gives you “rights to more profits” than Cameron’s, because Bill’s EPS is higher. Is this correct? Surely it depends on the price you paid for the shares. It’s “earnings per share” not “earnings per dollar invested”. So if $1,000 buys me 10 shares of Bill’s but 100 shares of Cameron’s then the former investment gives me rights to only $133.30 of profit but the latter gives me rights to $800.00 of profit - clearly better. Correct?

[@tomisss3]

This video is true only if stocks of both companies has same price

[@misaeljulian1985]

GameStop has an EPS of 598.64 😩 and the company has $1 billion cash on hand 😩😩

[@botsneako]

does eps mean how much your earn from one share ?

[@RyanDinz]

Great explanation! Keep up the hustle, subs wil come around the more you post. Here's one more for Team Ry

[@Rynance]

Thanks for dropping by! I appreciate the support!

[@jawadarif5676]

Does esp - mean the company is loseing money

[@gabakbusiness]

and if the EPS is negative what does it mean?

[@user-es1dk4gx3v]

Hi all , I am a beginner and found that very difficult I want to learn from you.

[@FRANKWHITE1996]

3:39 wait. But what if BIKE share costs 1kusd which means I get 13,3usd for 1kusd invested, vs and if CARPET share cost 100usd which for 1kusd investment gives me 10shares and each gives 8usd eps? Then CARPET investment is better because 10x8=80 vs 1x13,3=13,3. How then eps let’s easy to compare two different companies? I don’t get it.

[@chrisfr3sh]

where do i go to find the "shares outstanding" and also when you say "profit" am i looking at the market cap?

[@Rynance]

You can find shares outstanding on Yahoo Finance usually. If not there, you will be able to find the number of shares outstanding on the balance sheet in their most recent quarterly report. For profit, no, it is not market cap. Profit can be found in the income statement in their quarterly reports as well, typically referred to as 'net income'.

[@chrisfr3sh]

@@Rynance yeah im having trouble where to find “preferred dividends” on yahoo financial balance sheet. could it be named something else?

[@Rynance]

@@chrisfr3sh that will be a little more difficult to find. To find the total paid in preferred dividends, you’ll have to go to the company’s website, go to investor relations, and find their most recent annual or quarterly report. In there, find the ‘statement of cash flows’ and there you can find the total paid in preferred dividends. I hope that makes sense!

[@lammy0223]

I’m having a hard time searching a companies earning/profits to input into the equation 1:26

[@stoicaalex90]

The bigger eps the better, correct?

[@Rynance]

Yep!

[@tituspullo3946]

What if Bill's Bike Shop is valued at $20 per share, and Cameron's is valued at $0.10 / share ? 1 share bills = 200 shares Cameron. That makes it seems like Cameron's business is 200x more effective at producing profit. Or to Bill's 13.33 profit, cameron's capital produced $1600 profit. Not sure that I get it. ;p. And if I do get it, then it is nearly a useless metric. Ah yep, suspicion confirmed. EPS is only meaningful in P/E calculation. Thanks for the vids, they are good. :)

[@Johndebesse1433]

Your dumb

[@Johndebesse1433]

If the share price is lower than explained in the video then the eps will also be lower leaving those 200 stock you get for Cameron less valuable profit wise then bills