Yield on Cost Calculator
Compare the dividend yield on what you originally paid with the current market yield, and see how a growing dividend lifts your personal return.
How it works
Yield on cost = annual dividend ÷ purchase price × 100 · Current yield = annual dividend ÷ current price × 100
Yield on cost measures the dividend against the price you actually paid, while current yield measures it against today’s price. As a company raises its dividend over the years, your yield on cost climbs even though the market yield may stay flat, because your cost basis is fixed. It is a useful way to see the income power of a long-held position, but a new buyer only ever earns the current yield.
Worked example
You bought at $40 and the stock now pays $2.50 a year. Your yield on cost is 2.50 ÷ 40 = 6.25%, but at today’s $60 price the market yield is only 2.50 ÷ 60 = 4.17%. Holding through years of dividend hikes is what lifted your personal yield.
Frequently asked questions
Why is yield on cost higher than current yield?
Because the dividend has grown since you bought, while your purchase price is locked in. A rising numerator over a fixed denominator pushes yield on cost above the yield a new buyer gets at the higher current price.
Is a high yield on cost a reason to hold?
Not by itself. Yield on cost is backward-looking — it reflects a low purchase price, not future prospects. Evaluate whether the stock is still a good buy at today’s price and yield, not at your old cost.
Does yield on cost affect my taxes?
No. Dividend tax is based on the dividends actually received, regardless of your yield on cost. Yield on cost is just a personal performance metric.
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Educational estimate, not investment advice. Returns are hypothetical and not guaranteed.