Earnings Per Share (EPS) Singapore: The Profit Metric Behind Every P/E Ratio
How EPS is calculated, why it drives valuation, and where it can be misleading.
Earnings Per Share (EPS) is a company’s net profit divided by its total number of outstanding shares, measuring how much profit is attributable to each individual share and forming the basis of the widely used Price-to-Earnings (P/E) ratio.
Not financial advice. All figures for educational reference only. Data as at October 2026. Last updated: October 2026.
Table of Contents
Key Takeaways
- EPS is calculated as net profit (after preference dividends) divided by the weighted average number of ordinary shares outstanding.
- EPS is the denominator-flipped building block of the Price-to-Earnings (P/E) ratio, one of the most common valuation metrics used on SGX.
- Basic EPS uses actual shares outstanding, while diluted EPS accounts for potential shares from options, warrants or convertible instruments.
- A rising EPS over time generally signals improving profitability per share, but it can also be boosted artificially by share buybacks that reduce the share count.
- For Singapore REITs, Distribution Per Unit (DPU) is the more relevant metric than EPS, since REITs are structured to distribute income rather than retain earnings.
What Is EPS?
EPS translates a company’s total profit into a per-share figure, which is essential because investors buy individual shares, not the whole company. A company earning S$100 million in net profit sounds impressive, but whether that is attractive to a shareholder depends entirely on how many shares that profit is spread across. EPS is reported in every SGX-listed company’s quarterly and annual financial statements, typically as both ‘basic EPS’ and ‘diluted EPS’.
How Does EPS Work in Singapore?
SGX-listed companies report EPS in cents per share in their financial results, calculated using the formula: (Net Profit − Preference Dividends) / Weighted Average Number of Ordinary Shares Outstanding. The weighted average accounts for shares issued or bought back partway through the reporting period, giving a fairer figure than using the period-end share count alone. Diluted EPS additionally assumes all convertible securities, employee share options and warrants are converted into ordinary shares, giving a more conservative (lower) EPS figure when such instruments exist.
| EPS Type | What It Assumes | When It Matters Most |
|---|---|---|
| Basic EPS | Only actual shares currently outstanding | Companies with simple capital structures |
| Diluted EPS | All options, warrants, convertibles are exercised/converted | Companies with employee share schemes or convertible bonds |
Source: Singapore Financial Reporting Standards (SFRS)
EPS Example
If a company reports net profit of S$150 million for the year and has a weighted average of 1 billion shares outstanding, its basic EPS is S$150 million / 1 billion = S$0.15, or 15 cents per share. If the stock trades at S$1.80, its P/E ratio is S$1.80 / S$0.15 = 12 times, meaning investors are paying 12 times the company’s per-share earnings for the stock. If the same company bought back and cancelled 100 million shares during the year without any change in net profit, EPS would rise to roughly S$0.167, illustrating how buybacks can lift EPS even without underlying profit growth.
Advantages of Using EPS
- Standardised profitability measure. EPS allows a direct per-share comparison of profitability across companies of very different sizes.
- Foundation for the P/E ratio. Nearly every valuation discussion on SGX stocks references EPS indirectly through the P/E ratio.
- Tracks profitability trends over time. Comparing EPS across quarters or years helps investors judge whether a company’s profitability per share is genuinely improving.
- Widely disclosed and standardised. SFRS requires consistent EPS reporting, making it easy to compare across SGX-listed companies.
Risks and Limitations
- Can be inflated by buybacks. A falling share count from buybacks can raise EPS even if total profit is flat or declining.
- Distorted by one-off items. Asset disposals, impairments or other non-recurring items can temporarily inflate or depress EPS, masking the underlying trend.
- Not comparable across different accounting policies. Companies using different depreciation or revenue recognition approaches can show different EPS for similar underlying economics.
- Says nothing about cash flow. A company can report positive EPS on an accrual basis while actually generating little or negative free cash flow.
EPS vs DPU
For REIT investors specifically, Distribution Per Unit (DPU) is the more relevant equivalent metric, since REITs operate under a different structure to ordinary companies.
| Feature | EPS (Companies) | DPU (REITs) |
|---|---|---|
| What it measures | Net profit per share | Distributable income per unit, usually paid out almost fully |
| Retention of earnings | Companies may retain profit for growth | REITs must distribute at least 90% of taxable income to enjoy tax transparency |
| Relevant valuation ratio | P/E ratio (price / EPS) | Distribution yield (DPU / unit price) |
Source: SGX listing framework for REITs vs ordinary companies
The Bottom Line
For Singapore investors, EPS remains the starting point for valuing ordinary SGX-listed companies via the P/E ratio, but it should always be checked against the quality of the underlying profit and, for REITs, swapped out entirely in favour of DPU.
Frequently Asked Questions
How is EPS calculated?
EPS is calculated as net profit (minus any preference dividends) divided by the weighted average number of ordinary shares outstanding during the reporting period.
What is the difference between basic and diluted EPS?
Basic EPS uses only the actual shares currently outstanding, while diluted EPS assumes all potential shares from options, warrants or convertible securities are also issued, resulting in a typically lower figure.
Can share buybacks increase EPS?
Yes. Reducing the number of shares outstanding through buybacks raises EPS mathematically, even if total net profit stays the same or falls.
Why don't REITs report EPS the same way?
REITs are structured to distribute most of their income to unitholders rather than retain it, so Distribution Per Unit (DPU) is the more meaningful and commonly reported metric instead of EPS.
Is a higher EPS always better?
Generally, rising EPS signals improving profitability per share, but investors should check whether the increase comes from genuine profit growth or from a shrinking share count via buybacks.