Yield on Cost: $40 Stock, $3.60 Dividend, Bought at $30
A stock bought at $30 now trading at $40 with a $3.60 annual dividend has a current yield of 9.00% but a yield on cost of 12.00%.
How to use this tool
- Enter the total annual dividend paid per share.
- Enter the current share price to get the market dividend yield.
- Enter your original cost per share to see your yield on cost.
- Add your share count to estimate total annual dividend income.
- Compare the market yield with your yield on cost over time.
Compare the current dividend yield vs. yield on cost when a stock has appreciated significantly since your purchase.
Frequently asked questions
- How is dividend yield calculated?
- Divide the annual dividend per share by the current share price and multiply by 100. For example, a $2.50 dividend on a $50 stock yields 5%.
- What is a good dividend yield?
- It depends on the sector and interest-rate environment. Broad-market yields are often 1.5–3%, while income-focused stocks may yield 4–6%. A very high yield can be a warning sign of a falling price or an unsustainable payout.
- What is yield on cost?
- Yield on cost measures the dividend against the price you paid rather than today's price. For dividend-growth stocks held a long time, it can rise well above the current market yield.
- Does a higher yield always mean a better investment?
- No. Yield ignores price risk, dividend sustainability, and total return. A stock can have a high yield simply because its price has dropped on bad news.