— Stock Market
Dividend Yield Calculator
Calculate dividend yield from dividend per share and stock price. Add purchase price for yield on cost, dividend growth for forward yield, tax for net yield, and payout frequency to annualize quarterly or half-yearly dividends.
Dividend yield
4%
- Annual dividend per share
- $2
Try: $2 dividend, $50 price, Yield on cost (bought at 40), Quarterly $0.50 + 100 shares, Payout & total return
— Yield on cost over the years
| Year | Dividend / share | Yield |
|---|---|---|
| 1 | $2 | 4% |
| 2 | $2 | 4% |
| 3 | $2 | 4% |
| 4 | $2 | 4% |
| 5 | $2 | 4% |
| 6 | $2 | 4% |
| 7 | $2 | 4% |
| 8 | $2 | 4% |
| 9 | $2 | 4% |
| 10 | $2 | 4% |
— Yield on cost as the dividend grows
Download— How it works
Dividend yield = annual dividend per share ÷ price × 100 (sub-annual dividends are annualized by frequency). Yield on cost = annual dividend ÷ purchase price. Forward yield = next year’s grown dividend ÷ price. Payout ratio = dividend ÷ EPS.
Current yield, and yield on cost
Dividend yield is simply the annual dividend per share divided by the price — a $2 dividend on a $50 stock yields 4%. If the dividend is paid quarterly or half-yearly, the calculator annualizes it first. The more interesting number for a long-term holder is yield on cost: the same dividend measured against what you actually paid. Buy at $40 and that $2 dividend is a 5% yield on your cost — and as the dividend grows, your yield on cost keeps climbing even though the market yield stays flat.
Worked example — $2 annual dividend, $50 price, bought at $40, growing 8% a year: Current yield = 2 ÷ 50 = 4%. Yield on cost = 2 ÷ 40 = 5% today. After ten years of 8% dividend growth, the yield on cost roughly doubles to about 10% — the quiet power of dividend growth.
Sustainability and total return
A high yield is only good if the dividend lasts. The payout ratio — dividend divided by earnings per share — shows how much of profit is being paid out: under ~60% is comfortable with room to grow, above 80% leaves little cushion, and over 100% means the company is paying more than it earns, which rarely holds. Yield is also only half the story: total return adds expected capital appreciation to the dividend yield, so a 4% yield with 6% price growth is a 10% total return. Enter your tax rate to see the net yield you keep.
Reading the projection
The table and chart project your yield on cost forward as the dividend grows — the line that makes dividend-growth investing compelling, since a modest starting yield can become a large one on your original cost over a decade or two. It assumes a steady growth rate, which real dividends rarely follow exactly (they can be cut), so treat it as illustrative. This is an arithmetic tool, not investment advice — dividends aren’t guaranteed, and a very high yield often signals the market expects a cut.
— Reader questions
How do I calculate dividend yield?
Divide the annual dividend per share by the current share price and multiply by 100. A $2 dividend on a $50 stock is a 4% yield. Quarterly or half-yearly dividends are annualized first.
What is yield on cost?
The annual dividend divided by the price you paid, rather than the current price. If you bought lower than today’s price, it’s higher than the market yield — and it rises over time as the dividend grows, while the market yield stays put.
What is a forward dividend yield?
Next year’s expected dividend (after growth) divided by today’s price. It’s a forward-looking view for a growing dividend, slightly above the current yield when the dividend is rising.
What payout ratio is sustainable?
Generally under about 60% is comfortable, 60–80% is moderate, and above 80% is stretched. Over 100% means the dividend exceeds earnings — usually a warning that a cut may be coming.
Is a higher dividend yield always better?
No. An unusually high yield often means the price has fallen because the market expects a dividend cut. Check the payout ratio and the company’s earnings — sustainable growth beats a fragile high yield.