The Free Cash Flow (FCF) Yield is a financial metric that shows how much free cash flow a company generates relative to its market value.
It’s expressed as a percentage and helps investors understand how efficiently a company is generating cash in comparison to its stock price.
In simple terms: It tells you how much money a company makes (after paying all expenses, etc.) per year relative to its own market cap 🧢.
What Is Considered a High FCF Yield?
✅ High FCF Yield: Above 8% is typically considered good.
Why is it good?
✔️ It means the company is generating a lot of cash compared to its stock price.
✔️ It could indicate a good value investment opportunity.
✔️ And yes, the real Warren Buffett loves companies with strong FCF Yield + a moat… Who doesn’t? 😏
FCF Yield of Top Companies (CN & US)
Here are some well-known companies from China and the U.S., along with their FCF Yields:
China
🔹 Tencent Holdings – 9.95% 🤩🤩
🔹 Alibaba Group Holding – 7.03% 🤩
🔹 Baidu, Inc. – 13.78% 🤩🤩🤩
🔹 JD.com – 4.66%
🔹 NetEase Inc – 4.63%
🔹 PDD Holdings – 3.50%
🔹 Bilibili Inc – 2.62%
🔹 TAL Education Group – 1.97%
🔹 New Oriental Education & Technology – 1.61%
🔹 Li Auto Inc. – 1.34%
United States
🔹 Gilead Sciences – 8.48%
🔹 Pfizer Inc. – 5.82%
🔹 Qualcomm Inc – 6.13%
🔹 Merck & Co. – 5.80%
🔹 Johnson & Johnson – 5.80%
🔹 Alphabet Inc – 4.00%
🔹 Microsoft Corporation – 2.20%
🔹 Broadcom Inc – 2.90%
🔹 Palo Alto Networks – 2.90%
🔹 Apple Inc – 6.30%
💬 Which of these companies do you think is the best value based on FCF Yield?
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