What is Free Cash Flow Yield?
Free Cash Flow (FCF) Yield shows how much cash a company generates per dollar of stock price. Unlike earnings yield, it strips out non-cash accounting items and focuses on what's actually available to shareholders. Higher is better — a 6% FCF yield is roughly equivalent to a long Treasury yield, but with the upside of business growth.
Formula
FCF Yield = Free Cash Flow Per Share ÷ Share Price
How TopTier Strategy uses Free Cash Flow Yield
FCF Yield is one of the most important Valuation inputs in our framework — it captures real economic value created, not accounting noise.
Related Glossary Terms
Other concepts in the Valuation pillar.
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