Yield on Cost Calculator
Compare dividend yield on your purchase cost with yield at a current share price, then model dividend growth under a constant rate.
How the yield comparison works
Yield on cost divides the current annual dividend per share by your original purchase price per share. Current yield divides the same dividend by the current share price. The difference is shown in percentage points. Annual dividend income multiplies the per share dividend by your share count.
Enter the average purchase price per share for the position, your shares, the current annual dividend per share, and a current price. If you bought in several transactions, calculate and enter the weighted average purchase price yourself. The ticker search can fill the current price only when the quote reports the page currency.
The timeline applies your annual dividend growth assumption to the dividend per share for each year. It keeps the share count and purchase price fixed. It does not reinvest dividends or model share purchases, and the growth path is a scenario rather than a forecast.
Use the comparison to understand how the dividend rate relates to your stated purchase cost and current price. A higher yield on cost does not measure total return or show whether a holding is a better use of new money.
Steps
- Enter the ticker and position inputs using one currency and the same per share basis.
- Review yield on cost, current yield, their percentage point difference, and annual dividend income.
- Change the growth assumption to inspect a fixed share count scenario for future dividends.
Worked example
Suppose you own 100 shares bought at 50 USD per share. The current share price is 120 USD, the current annual dividend is 2.40 USD per share, and the assumed annual dividend growth rate is 8%.
Yield on cost is 4.8%, current yield is 2.0%, and their difference is 2.8 percentage points. Annual dividend income is 240 USD. If the dividend grew by 8% every year, the modeled annual dividend per share would be about 3.526387 USD in year 5 and 5.181420 USD in year 10. With the original purchase price fixed, projected yield on cost would be about 7.052775% and 10.362840%. These are constant growth scenarios, not expected results.
When this comparison is useful
Use the calculator to compare the dividend rate on an existing position’s purchase cost with the rate at a current share price. It can also show annual cash dividends for the share count you enter.
The comparison describes two denominators for the same current dividend. It does not account for changes in share price, dividend sustainability, taxes, or alternative uses of capital.
Checks before interpreting the result
Use a purchase price that reflects your average cost per share for the shares entered. Keep purchase price, current price, and annual dividend per share in the same currency and on the same split adjusted basis.
Confirm that the dividend is an annual amount per share, not a quarterly payment or a portfolio total. A ticker quote can become stale, and the company may change its dividend after the value you enter.
Formula and assumptions
Current yield (%) = annual dividend per share ÷ current price per share × 100
Yield on cost (%) = annual dividend per share ÷ original purchase price per share × 100
Difference (percentage points) = yield on cost − current yield
Annual dividend income = annual dividend per share × shares
Projected dividend per share in year n = current annual dividend per share × (1 + growth rate ÷ 100)^n
Projected yield on cost in year n = projected dividend per share ÷ original purchase price per share × 100
Growth is compounded once per year as a user selected scenario. The projection keeps shares and purchase price unchanged and assumes no dividend reinvestment. It does not estimate future share prices or total return.
Assumptions and limits
The calculation treats the entered annual dividend per share as current and unchanged for the yield comparison. The projection compounds the chosen annual growth rate for up to 10 years while holding shares and original purchase price constant. It does not model reinvestment, price changes, dividend cuts, special dividends, splits, fees, taxes, or total return. Use values with the same currency and per share basis. A quote is a snapshot when available and is not guaranteed current.
Terms
- Yield on cost
- Current annual dividend per share divided by original purchase price per share, multiplied by 100. It relates the current dividend to the entered historical cost.
- Current yield
- Current annual dividend per share divided by current share price, multiplied by 100. It uses today’s price as the denominator.
- Yield difference
- Yield on cost minus current yield, measured in percentage points. It compares the two ratios and is not an added return.
Related tools
The Dividend Tax Comparator models a separate tax scenario for dividend income. The Compound Interest Comparator models balance growth with contributions and a chosen rate. Neither tool changes this calculator’s dividend assumptions.
The Ex Dividend Calendar shows dates associated with dividend events. Check each tool’s inputs and limits because event dates, dividend amounts, and yield calculations answer different questions.
FAQ
What is yield on cost?
It is the current annual dividend per share divided by the original purchase price per share, expressed as a percentage. It describes the dividend relative to that stated historical cost. It does not include price gains or losses.
How does yield on cost differ from current yield?
Yield on cost uses original purchase price per share as its denominator. Current yield uses current price per share. Both use the same annual dividend per share here, so their difference is expressed in percentage points.
Does a higher yield on cost mean a holding is better?
No. Yield on cost is a ratio to a past purchase cost, not a measure of total return, dividend safety, or value at today’s price. It does not by itself compare keeping a holding with selling it or investing new money.
How are future yield on cost values calculated?
The timeline compounds the annual dividend per share by your entered growth rate once per year, then divides each projected dividend by the unchanged original purchase price. The share count stays fixed and dividends are not reinvested.
Does the projection predict future dividends?
No. It applies a constant growth assumption that you choose. Companies can raise, hold, reduce, or stop dividends, so the timeline is an illustration and not a forecast.
Related tools
Use the Dividend Tax Comparator for a dividend income tax scenario, the Compound Interest Comparator for balance growth scenarios, or the Ex Dividend Calendar to review dividend event dates.