# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Earnings per Share Growth Percentage

This figure represents the annualized rate of net-income-per-share growth over the trailing one-year period for the stocks held by a fund.

Earnings-per-share growth gives a good picture of the rate at which a company has grown its profitability per unit of equity.

All things being equal, stocks with higher earnings-per-share growth rates are generally more desirable than those with slower earnings-per-share growth rates. One of the important differences between earnings-per-share growth rates and net-income growth rates is that the former reflects the dilution that occurs from new stock issuance, the exercise of employee stock options, warrants, convertible securities, and share repurchases.

Morningstar aggregates earnings-per-share growth figures for mutual funds using a median methodology, whereby domestic stocks are ordered from highest to lowest based on their earnings-per-share growth rates. One adds up the asset weighting of each holding until the total is equal to or greater than half of the total weighting of all domestic stocks in the fund. The earnings-per-share growth rate for that stock is then used to represent the earnings-per-share growth rate of the total portfolio.

 

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