Yield on Cost Calculator
Compare your current yield with your yield on cost. Enter what you paid, today's price, and the dividend to see how much your original investment is really earning. Free, no signup.
Current yield
3.00%
Based on today's price.
Yield on cost
6.00%
Based on what you paid.
What is yield on cost?
Yield on cost is the annual dividend divided by the price you originally paid for a share, rather than today's price. It shows how much income your actual investment is earning, regardless of where the share price has gone since you bought.
How it's calculated
Divide the annual dividend by your original purchase price per share and multiply by 100. If you paid $50 and the dividend is now $3 a year, your yield on cost is 6%. If the share price has since risen to $100, the current yield is only 3%, but your yield on cost stays 6% because it's based on what you actually paid.
Current yield vs. yield on cost
| Metric | Uses | Example |
|---|---|---|
| Current yield | Today's price | 3% ($3 / $100) |
| Yield on cost | Your purchase price | 6% ($3 / $50) |
Illustrative example. Actual prices and dividends vary.
Why it matters
Yield on cost rewards patience. A company that raises its dividend year after year can turn a modest starting yield into a generous one on your original dollars. Long-term holders often care less about today's yield and more about whether a company can keep raising its payout.
Frequently asked questions
What is yield on cost?
Yield on cost is the annual dividend divided by the price you originally paid for a share, rather than today's price. It shows how much income your original investment is earning, regardless of where the share price has gone since.
What is the difference between yield and yield on cost?
Current yield uses today's share price and tells a new buyer what they'd earn now. Yield on cost uses your original purchase price and tells you what your actual investment is earning. The same dividend can produce a very different number for each.
How is yield on cost calculated?
Divide the annual dividend by your original purchase price per share, then multiply by 100. If you paid $50 and the dividend is now $3, your yield on cost is 6%, even if the share price has risen to $100 (a 3% current yield).
Why does yield on cost go up over time?
When a company raises its dividend while your purchase price stays fixed, your yield on cost rises. A modest starting yield can grow into a large one after years of dividend increases, which is why long-term holders often focus on dividend growth.
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Last updated: 2026-09-18 ยท By Frank Morales
Start your free trialDividend Snowball is for educational purposes only and is not investment advice. Projections are estimates based on assumptions, not predictions. Dividends can be cut, returns vary, and past dividend raises don't guarantee future ones.