Dividend Yield Calculator

What is Dividend Yield?

Dividend yield is a financial ratio that tells you how much cash income a company pays out relative to its stock price. Expressed as a percentage, it shows how much you earn in dividends for every dollar invested in the stock. A stock priced at $50 that pays $2 per share annually has a dividend yield of 4%.

Dividend yield is a key metric for income investors — those who want their portfolio to generate regular cash flow without selling shares. High-dividend stocks like REITs, utilities, and established blue-chip companies often attract retirees and conservative investors seeking steady income.

Yield on cost is a related metric that compares your annual dividend income to your original purchase price rather than the current price. If a stock you bought for $40 now pays $2 per share, your yield on cost is 5% even if the current yield is only 4%. This shows the true income power of long-term dividend growth investing.

Dividend Yield Formula

The dividend yield and yield on cost formulas are straightforward:

• Annual Dividend Per Share — Total dividends paid per share over one year (quarterly × 4, or as declared).
• Current Stock Price — The market price of one share today.
• Your Cost Basis — The price you originally paid per share.
• Annual Income — Annual Dividend Per Share × Number of Shares Owned.

Example: Dividend Income from 100 Shares

Suppose you own 100 shares of a stock currently trading at $50 per share that pays an annual dividend of $2.00 per share. You bought the shares at $40 each.

Notice that yield on cost (5%) is higher than current yield (4%) because you bought at a lower price. As companies grow their dividends over time, your yield on cost increases even if the current yield stays the same — a powerful benefit of holding dividend-growth stocks long term.

For illustrative purposes only. Dividends are not guaranteed and may vary.