Yield on Cost Calculator
See what your original purchase yields today after years of dividend growth — and how that compares to today’s market yield.
Why yield on cost matters
Yield on cost is the metric dividend-growth investors actually care about. It compares the current annual dividend per share to the price you originally paid. A stock bought 10 years ago at $40 that now pays $3 per share has a yield on cost of 7.5%, even if today’s market yield (based on today’s price) is much lower.
Over a long holding period, YoC tends to compound upward as management raises the dividend. A 4% yielder that increases its dividend 5% per year for 15 years ends up paying you about 8.3% on your original cost. That’s why long-term dividend holders fixate on YoC instead of current market yield — the current yield resets every time the price moves, but YoC only depends on the dividend versus your fixed cost basis.
For new positions, market yield is the right comparison. See the dividend yield calculator for that. For projecting how a starting yield + dividend growth rate compounds over 10–20 years (the math behind the YoC numbers above), see the dividend reinvestment calculator.
Frequently asked questions
- What is yield on cost (YoC)?
- Yield on cost compares the current annual dividend per share to your original purchase price, not today’s share price. A stock you bought at $40 that now pays $3 per year has a 7.5% YoC, even if today’s market yield is only 4% because the price has doubled.
- Why does YoC matter?
- YoC is the metric long-term dividend-growth investors actually care about. Market yield only tells you what a fresh dollar would earn today. YoC tells you what your past dollars are earning now — which compounds upward over years as a dividend grows. A 4% yielder with 5% annual dividend growth has roughly a 6.5% YoC after 10 years.
- YoC versus market yield — which is "real"?
- Both. Market yield is what a new buyer would earn today; YoC is what you (the existing holder) earn on the capital you originally committed. For new investments, market yield is what matters. For evaluating a long-held position, YoC is the better number.
- Should I sell a stock with low YoC?
- Not necessarily. Low YoC is often just the flip side of huge price appreciation — your capital has compounded into something much more valuable. The real question is whether the after-tax dividend stream of holding still beats what you could earn by selling and redeploying.
- Does this include reinvested dividends?
- No — YoC is a per-share metric on the original cost. To project the future of a portfolio that reinvests dividends and adds contributions, use the Dividend Reinvestment Calculator.