Dividend Yield Calculator
Calculate your dividend income, yield on cost, and see how reinvesting dividends compounds your returns over time.
4.00%
$200
$50
$1,121
With DRIP enabled, dividends buy additional shares each period, accelerating portfolio growth.
Yield on cost shows what you earn relative to your original purchase price — not today's price. A 5% annual dividend growth rate means your effective yield on the $50.00 you paid today will grow to:
Year 5
5.1%
yield on cost
Year 10
6.5%
yield on cost
Year 20
10.6%
yield on cost
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Frequently Asked Questions
What is dividend yield and how is it calculated?
Dividend yield is the annual dividend payment divided by the current stock price, expressed as a percentage. For example, if a stock pays $2.00 per share annually and trades at $50, the dividend yield is 4% (2 ÷ 50 = 0.04). It tells you how much cash income you receive relative to what you paid.
What is a good dividend yield?
A 'good' yield depends on your goals. Yields between 2–4% are typical for reliable dividend payers like consumer staples and utilities. Yields above 5–6% can be attractive but also signal elevated risk—companies sometimes cut dividends when they can't sustain high payouts. Focus on dividend growth history and payout ratio alongside the yield itself.
What is yield on cost?
Yield on cost (YOC) measures your annual dividend income as a percentage of what you originally paid per share—not the current price. If you bought a stock at $30 and it now pays $3/share annually, your YOC is 10% even if the current yield at today's price is only 3%. Long-term dividend growth investors often watch YOC as a sign their original purchase is paying off.
Should I reinvest dividends (DRIP)?
For long-term investors who don't need the income now, reinvesting dividends automatically compounds your returns by buying more shares. Over 20–30 years, DRIP can nearly double your final portfolio value compared to taking dividends as cash. If you rely on the income in retirement, taking cash makes more sense.
What is a payout ratio and why does it matter?
The payout ratio is the percentage of earnings paid as dividends. A payout ratio under 60% is generally sustainable—the company retains enough profit to grow and weather downturns. Payout ratios above 80–90% can signal that a dividend cut is coming, especially if earnings are falling.