Free cash flow yield: what it is and how to read it
One year's free cash flow divided by the company's market value. It tells you the cash return you would get if you owned the whole company at today's price.
How it is calculated
FCF yield = annual free cash flow / market cap. Like the inverse of the P/E, but with cash.
How to read it
A 5% yield means the company generates 5% of its market value in free cash each year. Above 6-7% is usually seen as high; compare it with the yield on a 10-year government bond.
Free cash flow yield in the MeridIAn ranking
Among the 1,630 companies in the ranking with data, the median Free cash flow yield is 3.6%: half are below and half above. The lowest 25% are below 1.2% and the highest 25% above 6.6%.
For example: NVIDIA, 0.8%; Apple, 2.2%; Alphabet, 0.5%; Inditex, 3.9%.
By sector
| Sector | Median | Companies with data |
|---|---|---|
| Basic Materials | 3.5% | 138 |
| Communication Services | 6.8% | 98 |
| Consumer Cyclical | 4.5% | 221 |
| Consumer Defensive | 5.5% | 123 |
| Energy | 4.3% | 99 |
| Healthcare | 2.9% | 212 |
| Industrials | 3.4% | 375 |
| Technology | 2.9% | 273 |
| Utilities | −5.0% | 91 |
Highest Free cash flow yield
What to watch out for
A one-off spike in free cash flow (for example, collecting a lot from customers at once) can give a misleading number. If it is negative, the company is burning cash.
Related metrics
All metrics in the glossary → · Stocks by sector and country → · Ready-made screeners →
General information for educational purposes, not investment advice. Figures from the latest weekly analysis (Oct 8, 2026) with the latest available price.