About the Yield on Cost Calculator
This yield on cost (YOC) calculator shows the dividend yield you earn on the money you originally invested, rather than on today’s share price. Enter your cost per share, the current annual dividend and today’s price to see yield on cost next to current yield and your annual dividend income.
Dividend-growth investors use yield on cost to track how a rising payout is rewarding a long-held position — a stock bought at a 3% yield can pay 6% or more on cost a decade later if the company keeps raising its dividend. Add the dividend you received when you bought and how long you have held the shares to see the historical dividend growth rate, then project yield on cost forward.
Yield on cost is a personal income measure, not a valuation tool: when deciding whether to hold or sell, compare the current yield and total return with your alternatives, because the money tied up in the position is worth today’s price, not what you paid.
With the default inputs, the yield on cost is 6%. Change any value above to recalculate instantly.
How to use the yield on cost calculator
- 1Enter your shares and average cost per share from your brokerage statement.
- 2Enter the current annual dividend per share and today’s share price.
- 3Optionally add the dividend at purchase and years held to see past dividend growth.
- 4Set an expected growth rate and projection period.
- 5Compare yield on cost with current yield and review the projected income.
Formula and method
Yield on cost divides the current annual dividend per share D by your average cost per share C. Current yield divides the same dividend by today’s price P, so the two differ only by how the price has moved since you bought. The yield when purchased uses the dividend D₀ you received at the time.
The historical dividend growth rate is the compound annual growth from D₀ to D over the t years held. The projection grows today’s dividend at your chosen rate g for n years and divides by the unchanged cost basis, which assumes you add no new shares and do not reinvest dividends.
- D
- Current annual dividend per share
- D₀
- Annual dividend per share when you bought
- C
- Average cost per share
- P
- Current share price
- g
- Assumed future dividend growth rate
- t, n
- Years held and years projected
Worked examples
100 shares bought at $40, now paying $2.40
A $2.40 dividend on a $40 cost is a 6% yield on cost, while a new buyer at $75 gets only 3.2%. The payout rose from $1.50 to $2.40 in 8 years, about 6.05% a year. Growing 6% a year for 10 more years, the yield on cost would reach about 10.75%.
Price has fallen since purchase
$2.20 on a $55 cost is a 4% yield on cost, but at the current $44 price the yield is 5%. The dividend grew from $2.00 to $2.20 in 3 years (about 3.23% a year); at 3% growth for 5 years the yield on cost would be about 4.64%.
Long-term holder: bought at $18, dividend now $3.10
After 20 years, a $3.10 dividend on an $18 cost basis yields 17.2% on cost — even though the stock yields just 2.58% at $120. The dividend has compounded about 8.56% a year from $0.60.
Frequently asked questions
What is yield on cost?+
Yield on cost is the annual dividend per share divided by the price you originally paid per share. It shows the income return on your own invested money, which rises over time if the company increases its dividend.
How is yield on cost different from dividend yield?+
Dividend yield (current yield) divides the dividend by today’s market price and is the same for every investor. Yield on cost uses your personal purchase price, so two people holding the same stock can have very different yields on cost.
Is a high yield on cost a reason to keep a stock?+
Not by itself. The capital in the position could be sold at today’s price and reinvested, so the fair comparison is the current yield and expected total return against your alternatives. Yield on cost is best used to track income growth.
Should reinvested dividends be included in cost basis?+
If you reinvest dividends, each purchase adds shares and cost. Using your total shares and average cost per share (including reinvested amounts) gives an accurate yield on cost for the whole position.
What is a good dividend growth rate?+
Many established dividend-growth companies have raised payouts by roughly 5–10% a year over long periods, but past growth is not guaranteed. Test a conservative rate to see a realistic range for future yield on cost.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.