Yield on Cost
Quick definition: Yield on cost is the annual dividend you receive today divided by the price you originally paid for the shares.
In plain English
Yield on cost = current annual dividend per share ÷ your original purchase price × 100
It shows how your personal income has grown compared with what you invested.
Example
You bought a stock at $50 when it paid $1.50 a year (3%). Ten years later it pays $3.00 a year. Your yield on cost is $3.00 ÷ $50 = 6%, even if the stock’s current yield for new buyers is only 3%.
Why it matters
It is a motivating way to see dividend growth working for you over time.
Common mistakes
- Treating it as your return. It ignores the current price and what the money could earn elsewhere.
- Comparing yield on cost with the yield of a new investment.
Investment Disclaimer
All information and tools on this website are provided for informational
purposes only. The calculations, examples, and projections are simplified
estimates and may not reflect real-world investment results.
Nothing on this website should be interpreted as financial, investment,
tax, or legal advice. You are solely responsible for your investment
decisions and any outcomes resulting from them.
Past performance and projected returns do not guarantee future results.
Always conduct your own research and consult a qualified financial advisor
before making investment decisions.