Dividend Yield Calculator
Calculate dividend yield, payout ratio and yield on cost.
Please note: For information only, not investment advice. Share prices can fall as well as rise and past performance does not predict future results.
What the Dividend Yield Calculator does
Dividend yield is annual dividend divided by share price. Yield on cost measures the same dividend against what you originally paid, which rises over time if the company grows its payout. The payout ratio shows how much of earnings funds the dividend — the key test of whether it can continue.
Formula
Dividend yield = Annual dividend ÷ Share price × 100Yield on cost = Annual dividend ÷ Purchase price × 100Payout ratio = Dividend per share ÷ Earnings per share × 100
Inputs explained
| Input | Unit | Required | Notes |
|---|---|---|---|
| Annual dividend per share | selected currency | Yes | Accepts more than 0. |
| Current share price | selected currency | Yes | Accepts more than 0. |
| Your purchase price | selected currency | Optional | Optional — shows yield on cost. Accepts 0 or more. |
| Earnings per share | selected currency | Optional | Optional — shows the payout ratio. Accepts 0 or more. |
| Currency | one of 10 options | Optional | — |
How to use it
- Choose Currency.
- Enter Annual dividend per share and Current share price.
- Optionally add Your purchase price and Earnings per share.
- Select Calculate.
Worked example
A $2.40 annual dividend on a $60 share, bought at $40, with $4.00 EPS.
- Dividend
- 2.40
- Price
- 60
- Purchase
- 40
- EPS
- 4.00
Yield 4%, yield on cost 6%, payout ratio 60% — sustainable with room to grow.
Reading the result
- Yield alone tells you what the dividend is worth today, not whether it will keep being paid — that is what the payout ratio is for. A high yield with a payout ratio above 100% is a warning, not a bargain.
- Yield on cost is a personal figure about your own purchase, not a market rate. Two investors holding the same stock today can have very different yields on cost depending only on when they bought.
Assumptions and limitations
- The annual dividend entered is treated as a steady, ongoing figure — the calculator cannot tell a normal recurring dividend from a one-off special dividend that inflates this year's number.
- EPS is assumed to be the same trailing period as the dividend figure. Mixing a trailing dividend with a forward EPS estimate (or the reverse) will skew the payout ratio.
Common mistakes
- Judging payout-ratio sustainability from a single year of EPS on a cyclical business, where one weak or strong year can make the ratio look far better or worse than the underlying trend.
- Treating this as a one-time calculation. Both share price and dividend change, so a yield checked at purchase becomes stale — re-run it periodically rather than relying on the number from months ago.
Frequently asked questions
What payout ratio is sustainable?
Below 60% generally leaves room for reinvestment and dividend growth. Above 100% means the company is paying out more than it earns, which cannot continue indefinitely.
Why does yield on cost matter?
It shows what your original investment now yields. A stock bought at a 3% yield that has doubled its dividend now yields 6% on your cost, regardless of the current market yield.