Calculate dividend yield from stock price and annual dividend. Compare trailing and forward yields, annual income, and yield on cost for any stock.
Dividend yield is one of the most important metrics for income-focused investors. It tells you what percentage of a stock's price is returned to shareholders as dividends each year, making it easy to compare the income potential of different stocks, REITs, and funds.
Our Dividend Yield Calculator computes both trailing yield (based on dividends already paid) and forward yield (based on the next expected annual dividend). It also calculates your yield on cost — the yield based on your original purchase price rather than the current market price — which is a key metric for long-term dividend investors.
Enter the stock price, dividend per share, and optionally your purchase price to get a complete picture of dividend income potential. Yield on cost can differ significantly from the current headline yield, especially for long-held positions where the stock price has moved substantially since purchase. Tracking yield on cost reveals whether your income stream is growing.
A stock trading at $100 that pays $3 per year in dividends and another at $50 paying $2 look very different in raw numbers, but dividend yield normalizes them to 3% and 4% respectively — making comparison instant. This tool also reveals how yield on cost improves over time as companies raise dividends, rewarding patient investors.
Dividend Yield = (Annual Dividend per Share / Current Price) × 100. Yield on Cost = (Annual Dividend per Share / Purchase Price) × 100. Annual Income = Dividend per Share × Number of Shares.
Result: Yield: 4.13%, Yield on Cost: 6.89%, Annual Income: $1,240
A stock priced at $150 that pays $6.20 per year has a current yield of 4.13%. If you originally bought at $90, your yield on cost is 6.89% — reflecting the benefit of buying before dividend increases and price appreciation. Owning 200 shares generates $1,240 per year.
Dividend yield should never be evaluated in isolation. A 6% yield from a utility with stable cash flows is very different from a 6% yield from a cyclical stock whose earnings are declining. Pair yield analysis with payout ratio, earnings growth, and free cash flow to determine if the dividend is sustainable.
Yield on cost is what makes dividend growth investing so compelling. If you buy a stock yielding 3% and the company raises its dividend by 7% per year, your yield on cost doubles in about 10 years — from 3% to over 6% on your original investment. This is the quiet engine behind many successful retirement portfolios.
High-yield stocks often have slower price appreciation, while growth stocks pay little or no dividends. Neither approach is inherently better. Your choice depends on whether you need current income or prefer capital growth. Many investors blend both strategies for a balanced portfolio.
The S&P 500 average yield is roughly 1.3-1.8%. Yields of 2-4% are common among stable dividend payers. Above 5% may indicate higher risk or a REIT structure. The "best" yield balances income with growth potential and sustainability.
Trailing yield uses dividends actually paid over the past 12 months. Forward yield uses the next expected annual dividend (often the most recent quarterly dividend times four). Forward yield is more useful when a company has recently raised or cut its dividend.
Yield on cost divides the current annual dividend by your original purchase price — not the current market price. If you bought a stock at $50 and it now pays $5/year, your yield on cost is 10%, even if the stock price has risen to $100 (where the market yield is only 5%).
An unusually high yield often means the stock price has dropped significantly, which may indicate the market expects the company to cut its dividend. Always check the payout ratio (dividends / earnings) and free cash flow coverage before chasing yield.
Most U.S. companies pay quarterly. Some REITs and foreign stocks pay monthly or semi-annually. When calculating yield, use the total annual payment regardless of frequency.
No. Dividends are declared by the board of directors and can be reduced or eliminated at any time. However, companies with decades of consecutive increases (Dividend Aristocrats, Dividend Kings) have strong track records of maintaining and growing payments.