Dividend yield tells you what a stock’s dividend is worth against what it costs to buy right now — the standard way to compare dividend income across different stocks.
How it works
Divide the annual dividend per share by the current share price. A $2 annual dividend on a $50 stock is a 4% yield; the same $2 dividend on a $100 stock is only 2%, even though the dollar amount paid out is identical.
Yield vs. yield on cost
Yield on cost divides the same dividend by what you originally paid, not today’s price. It only ever rises over time as a company raises its dividend, which makes it feel encouraging — but it says nothing about whether the stock is a good buy today, since it ignores the current price entirely.
How to use this calculator
- Enter the stock’s annual dividend per share.
- Enter its current share price.
- Optionally, enter what you paid per share to also see yield on cost.
Frequently asked questions
Is a higher dividend yield always better?
Not necessarily — an unusually high yield can mean the share price has fallen sharply, sometimes because the market expects the dividend to be cut.
Does dividend yield include dividend growth?
No, it’s a snapshot at today’s dividend and price. A company that grows its dividend steadily will show a rising yield on cost over time even if today’s yield looks unremarkable.
Why is my broker’s yield figure slightly different?
Brokers sometimes use the most recent quarterly dividend annualised (×4) rather than the trailing twelve months actually paid, which can differ slightly around a dividend change.
What’s a “normal” dividend yield?
It varies widely by sector and company maturity — there’s no single healthy number, and a very high yield deserves scrutiny rather than automatic enthusiasm.
