Finance & Money
Dividend Yield on Cost Calculator
Keep historical cost basis, current market value, current market yield, and projected yield on cost separate so a backward-looking ratio is not mistaken for current opportunity yield.
Historical position cost-
Current market value-
Current yield on cost-
Current market dividend yield-
Projected dividend per share-
Projected annual position income-
Projected yield on historical cost-
Decision view
Historical cost and market-yield comparison
Historical cost and market-yield comparisonCurrent market yield, current yield on historical cost, and the projected yield on cost are clearly distinguished.
Exact scenario comparisonExpected annual dividend growth (%) changes while all other entered assumptions remain constant.
| Expected annual dividend growth (%) | Historical position cost | Current market value | Current yield on cost | Current market dividend yield | Projected dividend per share | Projected annual position income | Projected yield on historical cost |
|---|
How to use Dividend Yield on Cost Calculator
- Use an accurate average cost per share.
- Compare yield on cost with current market yield.
- Evaluate total return and dividend safety separately.
Calculator guide
Understanding Dividend Yield on Cost Calculator
Yield on cost compares current dividends with historical purchase cost, while market yield compares the same dividend with today's share price.
Calculation method
How the calculation works
Compare current market yield with dividend yield on the entered historical cost basis and project yield on cost under a stated dividend-growth assumption. Divide the current dividend by average historical cost for yield on cost, divide by current price for market yield, then compound the dividend for the projection.
Interpretation
Use yield on cost as a history metric
It can describe the investment journey without deciding the next action.
Worked situations
Practical examples
- A low historical cost can create a high yield on cost.
- Selling and repurchasing resets the economic opportunity to current market value.
- Projected yield on cost assumes the dividend growth rate continues.
Better inputs
Useful tips
- Do not use yield on cost alone for hold decisions.
- Include reinvested-share cost basis when applicable.
- Review unrealized gains and taxes separately.
Before relying on the result
Limitations and common mistakes
- Yield on cost is historical and ignores opportunity cost.
- Dividend cuts, reinvestment, price changes, taxes, and total return are excluded.
- The projection does not assess business quality.
Reference
Key terms
- Cost basis
- Entered historical amount invested in the position.
- Yield on cost
- Current dividend divided by historical cost per share.
- Market yield
- Current dividend divided by current share price.
- Opportunity cost
- Return available from the position's current market value elsewhere.
Important note
Calculated from the entered values and stated financial terms. It is not a product quote, lending decision, tax filing, or investment recommendation.
Frequently asked questions
Which yield should compare two stocks today?
Current market yield is the consistent starting measure.
Does a high yield on cost mean the stock is cheap?
No.
Are reinvested dividends included?
Only if reflected in shares and average cost.
Does the forecast include price growth?
No.