The median profitable stock's earnings yield is 0.5 points below the 10-year Treasury yield, the thinnest gap since the series began in 2010

What it shows · fact

At the end of Jul 2026 the median profitable name in the book carried a trailing earnings yield of 4.3% against 4.75% on the 10-year Treasury: a gap of -0.5 points, the 1st percentile since Jun 2010 (average +2.2).

Including loss-making names, the median yield is 4.1% and the gap -0.6 points. 44 of 775 names had negative trailing earnings.

This is the thinnest gap in the series, which starts in Jun 2010.

Why it matters · inference

A gap below its average means equities offer less earnings yield over a riskless Treasury than usual: less room for error if earnings disappoint or yields rise.

Trailing earnings understate the yield for growing companies and overstate it ahead of an earnings decline; the gap is a starting point, not a forecast of returns.

What would change this read

A fall in the 10-year yield of 2.7 points with unchanged earnings yields would restore the average gap.

The factor table ends in Jul 2026; the 10-year yield has since moved to 4.83% (+0.08 points), which shifts the current gap by the same amount if earnings yields are unchanged.