The earnings per share ratio divides the net annual earnings of a company into the number of shares. Earnings-per-share growth gives a good picture of the rate at which a company has grown its profitability.
One of the important differences vs. net-income growth rates is that EPS growth reflects the dilution that occurs from new stock issuance, the exercise of employee stock options, warrants, convertible securities, and share repurchases. Stocks with higher earnings-per-share growth rates are generally more desirable than those with slower earnings-per-share growth rates.
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