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NDAQ (Nasdaq) Forward Rate of Return (Yacktman) % : 12.29% (As of Sep. 2024)


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What is Nasdaq Forward Rate of Return (Yacktman) %?

Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. Nasdaq's forward rate of return for was 12.29%.

The historical rank and industry rank for Nasdaq's Forward Rate of Return (Yacktman) % or its related term are showing as below:

NDAQ' s Forward Rate of Return (Yacktman) % Range Over the Past 10 Years
Min: 0.02   Med: 13.67   Max: 23.94
Current: 12.18

During the past 13 years, Nasdaq's highest Forward Rate of Return was 23.94. The lowest was 0.02. And the median was 13.67.

NDAQ's Forward Rate of Return (Yacktman) % is ranked better than
51.43% of 488 companies
in the Capital Markets industry
Industry Median: 11.765 vs NDAQ: 12.18

Unlike the Earnings Yield %, the Forward Rate of Return uses the normalized Free Cash Flow of the past seven years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.


Nasdaq Forward Rate of Return (Yacktman) % Historical Data

The historical data trend for Nasdaq's Forward Rate of Return (Yacktman) % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Nasdaq Forward Rate of Return (Yacktman) % Chart

Nasdaq Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Forward Rate of Return (Yacktman) %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 20.98 22.15 22.56 13.67 12.94

Nasdaq Quarterly Data
Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24
Forward Rate of Return (Yacktman) % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 13.77 12.94 12.66 13.19 12.29

Competitive Comparison of Nasdaq's Forward Rate of Return (Yacktman) %

For the Financial Data & Stock Exchanges subindustry, Nasdaq's Forward Rate of Return (Yacktman) %, along with its competitors' market caps and Forward Rate of Return (Yacktman) % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Nasdaq's Forward Rate of Return (Yacktman) % Distribution in the Capital Markets Industry

For the Capital Markets industry and Financial Services sector, Nasdaq's Forward Rate of Return (Yacktman) % distribution charts can be found below:

* The bar in red indicates where Nasdaq's Forward Rate of Return (Yacktman) % falls into.



Nasdaq Forward Rate of Return (Yacktman) % Calculation

Forward Rate of Return is a concept that Don Yacktman uses in his investment approach. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. He said in the interview (March 2012, when the S&P 500 was at about 1400):

If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.

The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).

Nasdaq's Forward Rate of Return of Sep. 2024 is

Forward Rate of Return=Normalized Free Cash Flow/Price+5-Year EBITDA Growth Rate
=2.4247619/73.01+0.0897
=12.29 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Nasdaq  (NAS:NDAQ) Forward Rate of Return (Yacktman) % Explanation

Unlike the Earnings Yield, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.

For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over five years. The reason we use five years is to make it comparable to the growth rate.


Be Aware

In the Forward Rate of Return calculation, the growth rate is added directly to today's free cash flow yield. Therefore the calculation is reliable only if the company can grow at the same rate in the future as it did in the past. Investors should pay close attention to this when researching growth stocks. A more accurate measurement for return is Return on Capital.


Nasdaq Forward Rate of Return (Yacktman) % Related Terms

Thank you for viewing the detailed overview of Nasdaq's Forward Rate of Return (Yacktman) % provided by GuruFocus.com. Please click on the following links to see related term pages.


Nasdaq Business Description

Industry
Address
151 W. 42nd Street, New York, NY, USA, 10036
Founded in 1971, Nasdaq is primarily known for its equity exchange, but in addition to its market-services business (about 35% of sales), the company sells and distributes market data as well as offers Nasdaq-branded indexes to asset managers and investors through its information-services segment (30%). Nasdaq's corporate-services business (20%) offers listing services and related investor relations products to publicly traded companies and through the company's market technology group (15%), Nasdaq facilitates the exchange operations of other exchanges throughout the world and provides financial compliance services.
Executives
John Zecca officer: Executive Vice President 151 W. 42ND STREET, NEW YORK NY 10036
Bradley J Peterson officer: Executive Vice President ONE LIBERTY PLAZA, NEW YORK NY 10006
Adenza Parent, Lp director, 10 percent owner ONE MARKET PLAZA, SPEAR TOWER, SUITE 2400, SAN FRANCISCO CA 94150
Bryan Everard Smith officer: Executive Vice President 151 W. 42ND STREET, NEW YORK NY 10036
Borse Dubai Ltd 10 percent owner LEVEL 7, PRECINCT BLDG 5, GATE DISTRICT, PO BOX 506690, DUBAI INTL FINANCIAL CTR, DUBAI C0 00000
Spaht Paul Holden Jr. director 600 MONTGOMERY STREET, 20TH FLOOR, SAN FRANCISCO CA 94111
Thoma Bravo Ugp, Llc director, 10 percent owner 110 N. WACKER DRIVE, 32ND FLOOR, CHICAGO IL 60606
Ann M Dennison officer: Controller and Prin Acctg Ofcr ONE LIBERTY PLAZA, NEW YORK NY 10006
Johan Torgeby director 151 W. 42ND STREET, NEW YORK NY 10036
Jeffery W Yabuki director 255 FISERV DRIVE, BROOKFIELD WI 53045
Adena T Friedman officer: Executive Vice President 1801 K STREET, N.W., WASHINGTON DC 20006
Michael R Splinter director
Steven D Black director C/O JPMORGAN CHASE & CO., 270 PARK AVENUE, NEW YORK NY 10017
Michelle Lynn Daly officer: Controller and Prin Acctg Ofcr 151 W. 42ND STREET, NEW YORK NY 10036
Brendan Brothers officer: Interim Head of AFC 151 W. 42ND STREET, NEW YORK NY 10036