Dividend Yield Calculator
Dividend yield = Annual Dividend / Share Price × 100. Example: $2.40 annual dividend on $60 stock = 4.0% yield. 100 shares → $240/year, $20/month. S&P 500 average yield ≈ 1.5%; utilities 3–5%; high-yield stocks 5–8%. Yield on cost = dividend / original purchase price — grows as dividends increase. DRIP (reinvestment) compounds returns: 4% yield + 5% dividend growth + reinvestment over 20 years can double income without adding capital.
Calculate dividend yield, annual and monthly income, and DRIP (dividend reinvestment) projections. Enter annual dividend per share, market price, and shares owned to get yield percentage, income, and portfolio value after reinvesting dividends over any time horizon with a dividend growth rate.
Dividend Details
Results
How to Use
- 1
Enter annual dividend per share
Find this in the stock's investor relations page or financial data service. If paid quarterly, multiply the quarterly dividend by 4 to get the annual total.
- 2
Enter share price and shares owned
Use the current market price (not your purchase price) for current yield. Enter how many shares you own to calculate your actual income.
- 3
Set dividend growth rate
Enter the expected annual dividend growth rate for projections. Look at the company's 5-year dividend growth history as a guide — "dividend aristocrats" typically grow 5–8%/year.
- 4
Set projection period
Enter how many years to project. The calculator models DRIP (reinvestment) — all dividends are used to buy more shares at current price, which grows over time.
- 5
Read the results
Dividend yield tells you current income return. Annual and monthly income shows actual cash from your position. Check final yield on cost to see how income grows as dividends increase over the projection period.
Frequently Asked Questions
- What is dividend yield and how is it calculated?
- Dividend yield = Annual Dividend Per Share / Current Share Price × 100. Example: stock pays $2.40 annually and trades at $60 → dividend yield = 4.0%. It tells you the income return on your investment (ignoring price appreciation). If you invest $6,000 in 100 shares at $60, you receive $240/year in dividends — a 4% income yield. Dividend yield changes every day as the stock price fluctuates, even if the dividend stays the same. Falling stock price → rising yield (not always good — can signal distress). Rising stock price → falling yield.
- What is a good dividend yield?
- General benchmarks: 0–1%: growth stocks (Microsoft, Google early stage) — most return comes from price appreciation; 1–3%: moderate yield, typical for large-cap dividend payers (S&P 500 average ≈ 1.5%); 3–5%: income stocks (utilities, consumer staples, REITs); 5–8%: high-yield stocks — check payout ratio and earnings sustainability; 8%+: very high yield, often signals elevated risk or dividend cut risk. The "right" yield depends on your goal: income investors prefer 3–5%+, growth investors accept 0–2%. Key check: is the dividend sustainable? A high yield from a falling stock price can be a "yield trap."
- What is the payout ratio and why does it matter?
- Payout ratio = Dividends Per Share / Earnings Per Share × 100. It measures what fraction of earnings is paid as dividends. A payout ratio of 50% is generally sustainable; 80%+ means limited room to grow the dividend or maintain it if earnings dip. Example: stock earns $4/share, pays $2/share dividend → payout ratio = 50%. REITs and MLPs often have 80–100% payout ratios by law but are evaluated differently. A low payout ratio (30–40%) with a history of dividend increases ("dividend growers" like the S&P 500 Dividend Aristocrats) often beats a high static yield over time.
- What is DRIP (dividend reinvestment) and how does it accelerate returns?
- DRIP (Dividend Reinvestment Plan) automatically uses dividends to purchase additional shares. This creates compounding: more shares → more dividends → even more shares. Example: 100 shares at $60, $2.40 dividend (4% yield), 5% annual dividend growth. Year 1: $240 buys 4 shares → 104 shares. Year 2: dividend grows to $2.52, 104 shares → $262 → buys 4.2 more shares. After 20 years of DRIP at 5% growth: original 100 shares grows to ~220 shares, portfolio value roughly triples even without any additional investment. DRIP is most powerful when started early and combined with dividend-growth companies.
- What is yield on cost and why do dividend investors track it?
- Yield on cost = Current Annual Dividend / Original Purchase Price × 100. It measures the income return on what you actually paid, not today's market price. Example: you bought 100 shares at $30 (total $3,000), dividend was $0.60/share (2% yield). Company grows dividend 8%/year for 15 years → dividend is now $1.90/share. Yield on cost = $1.90/$30 = 6.3% — much higher than the current 2.5% yield on today's $75 price. Dividend growth investors focus on yield on cost because it reveals the compounding income power of holding quality dividend-growers long-term.
- How do I use dividend yield to compare stocks?
- Dividend yield alone is not sufficient for comparison. Use these metrics together: (1) Yield: higher is more income, but check sustainability. (2) Payout ratio: <60% preferred for safety. (3) Dividend growth rate: 5–10%/year compounders build the most long-term income. (4) Consecutive years of increases: S&P 500 Dividend Aristocrats have 25+ years of consecutive growth. (5) Free cash flow coverage: dividends should be well-covered by FCF, not just earnings. (6) Sector comparison: 4% yield is average for utilities; it would be low for a REIT and high for a tech stock. Compare yield within the same sector and against the stock's own historical yield range.