Following up on the topic of valuations for U.S. equities, today we take a look at the historical level of the Earnings Yield. This measure tells us the earning yield of a company in relationship to its price (practically the reciprocal of the P/E ratio).  JP Morgan ran an interesting study of this metric adjusted for inflation.  The study shows that on a real basis, S&P 500 companies are yielding more earnings per dollar invested than most other points in the last 20 years.  The present Earnings Yield is at approximately 4%, down from an historic high of about 6% at the bottom of 2009.  This metric has a long way to go before flashing valuation warnings; the historical average stands at 2.5% and expensive readings have usually occurred at the zero level or below.