NAV, Dividend Yield and PE ratio on M* for VTSAX and VTI

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BenS
Posts: 47
Joined: Sat Jun 25, 2022 2:02 pm

NAV, Dividend Yield and PE ratio on M* for VTSAX and VTI

Post by BenS »

Dear Bogleheads,

I have one or two naive questions, and I am hoping to find some insight on this board.

(1) I believe I am confusing the NAV $ value versus the Price in P/E ratio.

I appreciate that VTI is the ETF version of VTSAX, and so I am compared VTI to VTSAX on M* expecting a reasonably quantitative match between the two. What I found is that under the portfolio tab(s) everything matches. Dividing distributions by the NAV(s), I can reproduce the ttm yield listed in the quote tab. However, the NAVs for VTI versus VTSAX are quite different (194.59 versus 94.71). I understand this has to do with what constitutes a share, and normalizing by dividend distributions the two match. However, say I wanted to calculate the (forward) earnings in P/E under the Portfolio tab? How would I convert the NAV value to the price in P/E for example? For both VTI and VTSAX the (forward) P/E = 16.91.

(2) Does anyone know how the Dividend Yield % (1.58%) under the portfolio tab is calculated? This is not the SEC yield (1.39%) or the ttm yield (1.44%) . For some ETFs and funds this Dividend yield % differs by nearly a factor of two from the ttm yield.

Any thoughts or guidance which you can provide would be much appreciated. To save time:

[https://www.morningstar.com/etfs/arcx/vti/portfolio][/url]
[https://www.morningstar.com/funds/xnas/vtsax/portfolio][/url]


Thanks,

Ben
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David Jay
Posts: 14569
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: NAV, Dividend Yield and PE ratio on M* for VTSAX and VTI

Post by David Jay »

(1) You are on the right track (understanding that there is no "standard size" for a mutual fund). I like the illustration of liquid volumes: One class is packaging it's holdings by the Pint and the other class is packaging it's contents by the Liter - which in this instance is almost your ratio. It is all the same stuff, just in different sized containers.

If you simply do the math you can arrive at your answer:
P/E is short for Price divided by Earnings = 16.91 [for both share classes]
$194.59 / x = 16.91 which is equivalent to 194.59 / 16.91 = x (earnings in dollars for this share class)
$94.71 / y = 16.91 which is equivalent to 94.71 / 16.91 = y (earnings in dollars for this share class)

as a shortcut, note that by definition the ratio of x/y is the same as the ratio of 194.59/94.71.

(2) Perhaps the most simple way to say it is that ttm is long term historic yield (12 months), SEC is short term historic yield (last month) and M* "Dividend Yield" is Morningstar's best estimate of current yield. Since they cover different time periods they will "always" be different.

Here is a good summary of the differences between ttm and SEC: https://www.thebalance.com/difference-b ... ld-2466432
It's not an engineering problem - Hersh Shefrin | To get the "risk premium", you really do have to take the risk - nisiprius
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