Dividend Yield
Calculate and analyze Forward vs. Trailing Dividend Yield, Yield on Cost (YOC), and project long-term dividend growth, DRIP compounding, tax drag, and inflation-adjusted total returns.
| Scenario | Profile | Forward Dividend Yield |
|---|---|---|
Base Settings | Default inputs and growth assumptions | 4.00% |
Conservative | Lower yield, higher inflation, haircuts | 4.00% |
Optimistic | Favorable yield, lower inflation, growth | 4.00% |
Stress Test | Severe economic crash and high inflation | 4.00% |
Dividend yield of 4.00% is strong, providing strong current income within the upper tier of Fidelity Dividend Benchmarks.
A stock purchased for **$100.00** per share, currently trading at **$100.00** with an annual dividend payout of **$4.00**, has a **forward dividend yield of 4.00%** and a **Yield on Cost of 4.00%**. Over a **10-year** holding period, an initial investment of **$10,000** is projected to grow to **$24,243** nominal (real value of **$18,938** adjusting for inflation), generating **$5,872** in cumulative dividend income.
How to Use the Dividend Yield
Dividend yield is a vital metric for income-focused investors. It measures the annual dividend payments a company distributes relative to its stock price. This calculator elevates standard analysis by comparing Forward vs. Trailing yields, determining your Yield on Cost (YOC), projecting dividend compounding (DRIP) with tax and inflation adjustments, and letting you compare two dividend investments side-by-side.
- Scenario Mode: Model projections under different hypothetical market conditions.
- Stock Purchase Price ($): The price at which you bought the shares (your cost basis).
- Current Market Price ($): The current trading price of the stock on the market.
- Dividend Input Type: Calculate yield based on the most recent payout (Forward) or past 12 months payments (Trailing).
- Latest Dividend Payout ($): The amount of the most recent single dividend payment per share.
- Payout Frequency: Number of times dividends are distributed per calendar year.
- Trailing 12-Month Dividend ($): The total dividends paid per share over the past 12 months.
- Projection Input Basis: Specify whether to calculate projection based on total investment capital or number of shares.
- Total Capital Invested ($): The initial amount of money invested in this stock.
- Number of Shares Owned: The number of shares you hold in your portfolio.
- Expected Dividend Growth Rate (%): The projected annual rate at which the dividend payment grows.
- Expected Price Appreciation (%): The projected annual rate of capital growth for the underlying share price.
- Reinvest Dividends (DRIP): Toggle whether to reinvest net dividends to acquire additional shares or receive cash.
- Expected Inflation Rate (%): The expected annual inflation rate for real purchasing power adjustment.
- Dividend Tax Rate (%): The tax rate applied to dividend income distributed.
- Projection Duration (Years): The holding period for the investment projections.
- Compare with Second Stock?: Enable side-by-side comparison with a second stock.
- Stock B Purchase Price ($): Purchase price for the comparison stock.
- Stock B Current Price ($): Current market price for the comparison stock.
- Stock B Latest Payout ($): Latest dividend payout for the comparison stock.
- Stock B Payout Frequency: Payout frequency for the comparison stock.
- Stock B Trailing Dividend ($): Trailing 12-month dividend for comparison stock.
- Stock B Div Growth Rate (%): Expected dividend growth rate for the comparison stock.
- Stock B Price Appreciation (%): Expected price appreciation rate for the comparison stock.
Dividend Yield Explained: Math & Calculation Rules
Understand the mathematics behind Dividend Yield, standard formulas, worked examples, and decision limits.
Read Full Guide →What is the difference between Forward and Trailing Dividend Yield?
Trailing Dividend Yield is based on dividends actually paid over the past 12 months (historical). Forward Dividend Yield is based on the latest dividend payout annualized (projecting that the current payment rate continues over the next 12 months).
What is Yield on Cost (YOC)?
Yield on Cost measures the dividend yield relative to the price you originally paid for the stock, rather than its current market price. As companies increase their dividends over time, your YOC increases, showing the growing income power of your initial investment.
What is a dividend trap?
A dividend trap occurs when an investor buys a stock solely for its extremely high dividend yield, only for the company to cut its dividend shortly after. The high yield is usually a reflection of a falling stock price due to deteriorating fundamentals.
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