AlgovestIQDividend math
Enter the price you paid and the annual dividend, or load a ticker and pick a purchase date. You get your yield on cost next to today's current yield, the dividends received since you bought, and a projection of yield on your original cost at a dividend growth rate you assume.
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Your assumption - not loaded from public data
Add today's price, or load a ticker, to compare your yield on cost with the current yield and see the gain on the position.
A high yield on cost is not, on its own, a reason to keep holding. The money tied up in the position today is its market value, and the current yield is what that money earns now.
An assumption you set, not a forecast or dividend history. Your original cost stays fixed at $40.00 a share; after N complete years the dividend is today's $2.00 x (1 + growth)^N.
| After | Dividend / share | Yield on original cost | Annual income |
|---|---|---|---|
| 1 year | $2.10 | 5.25% | $210.00 |
| 5 years | $2.55 | 6.38% | $255.26 |
| 10 years | $3.26 | 8.14% | $325.78 |
| 20 years | $5.31 | 13.27% | $530.66 |
Yield on cost = annual dividend per share / price you paid
Current yield = annual dividend per share / current price
Yield on cost after N years = yield on cost x (1 + assumed growth)^N
Yield on cost uses the same annual dividend as dividend yield but divides it by your purchase price instead of today's price. Your purchase price never changes, so every dividend raise lifts your yield on cost directly, while the current yield also moves with the share price.
Yield on cost = annual dividend per share / purchase price per share
Current yield = annual dividend per share / current price
Cost recovered = dividends received per share / purchase price
Dividend after N complete years = today's annual dividend x (1 + assumed growth)^N
Yield on cost after N complete years = that dividend / original purchase price
You bought 100 shares at $40. The company now pays $2.00 a year per share, so your yield on cost is $2.00 / $40 = 5.0% and the position pays $200 a year. The shares now trade at $65, so a new buyer earns $2.00 / $65 = 3.1%.
Your yield on cost is 1.9 percentage points higher because the shares have risen since you bought. If you started with a $1.20 dividend, a 3.0% yield on your $40, the climb from 3.0% to 5.0% is the dividend growth.
Looking ahead, assume the $2.00 dividend grows 5% a year while your $40 cost stays fixed. After ten complete years the dividend is $2.00 x 1.05^10 = $3.26, a yield on your original cost of 5% x 1.05^10 = 8.14%. That is an assumption, not a forecast.
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Check the yield a new buyer gets today, and the income it pays.
Calculate dividend yieldSee how reinvesting those dividends would have grown the position.
Model reinvestingProject the income forward at a growth rate you choose.
Project dividend incomeYield on cost is a stock's annual dividend divided by the price you originally paid, rather than today's price. If you bought at $40 and the dividend is now $2.00 a year, your yield on cost is 5%, whatever the stock trades at today.
Dividend yield divides the dividend by today's price, so it describes what a new buyer earns. Yield on cost divides by your purchase price, so it describes the income your original investment now produces. Whenever the shares trade above your purchase price, yield on cost is the higher of the two.
Not on its own. Your purchase price is already spent; the money tied up in the position today is its market value, and the current yield is what that money earns. Compared with the yield you started with, yield on cost is best read as a record of how much the dividend has grown.
With a ticker loaded, choosing a purchase date fills the closing price on that day, or the next trading day, adjusted for any later stock splits so it matches today's share count. The calculator also totals every dividend with an ex-dividend date after your purchase.
You may have paid a different price during the day than the closing price, and commissions add to cost basis. Enter your own price per share to override the closing price.
It holds your original cost fixed and grows today's annual dividend at the rate you assume. After N complete years the dividend is today's dividend x (1 + growth)^N, so at 5% growth a 5% yield on cost becomes 8.14% after ten years. The rate is your assumption, not a forecast or the company's history.