Yield on Cost Calculator

Yield on Cost (YoC) calculator measures dividend income vs original purchase price - showing the power of dividend growth investing. Bought stock at 20, now pays 2 dividend = 10% YoC. Compare to current yield (2/current price) - YoC almost always higher for long-term holders. For holders of companies that steadily raise dividends, yield on cost can climb well above the yield a new buyer sees today.

Example: bought 1,000 shares at 20 in 2010 (cost 20,000). Today company pays 2 annual dividend per share. Annual dividend income: 2,000. Yield on Cost = 2,000 / 20,000 = 10%. Even if current share price is 50 (current yield = 2/50 = 4%), YoC remains 10% based on what you actually paid. Power of dividend growth + holding period.

How yield on cost grows over time: suppose a share is bought at 20 with a 0.40 dividend, a 2% starting yield. If the dividend grows 7% a year, after 30 years the payout is roughly 3.00 per share, lifting yield on cost to about 15% even though the entry yield was only 2%. The longer the holding period and the faster the dividend grows, the further yield on cost rises above the original yield. This is why long-term holders of companies with decades of consecutive dividend increases can see a yield on cost far above what a new buyer earns at today's price.

Quick example

With current annual dividend of 2,000 and original cost basis of 20,000, the result is 10.00%. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.

Which inputs matter most

You enter Current Annual Dividend and Original Cost Basis.

What's happening under the hood

Yield on cost = annual dividend / original cost basis × 100. The formula is listed in full below. If the number looks off, you can retrace the calculation by hand — that's the point of showing the working.

Using this well

What this doesn't capture

This is a simplified model that holds its assumptions constant. Real outcomes vary with market conditions, costs, taxes, and timing, so the figure is best read as one scenario rather than a forecast.