Dividend Yield Calculator - Calculate Dividend Income Online Dividend Yield Calculator

What is Dividend Yield?

Dividend Yield is a financial ratio that shows how much a company pays out in dividends each year relative to its current stock price. It is expressed as a percentage and helps investors compare the income-generating potential of different stocks. A higher yield means more cash flow per unit invested.

Dividend Yield Formula

Key Concepts

• Dividend Yield: Based on current market price. Changes as stock price moves.
• Yield on Cost (YOC): Based on your purchase price. Shows the true return on your investment.
• Dividend Growth Rate: The annual percentage increase in dividends. Companies that consistently grow dividends are called "Dividend Aristocrats".
• Payout Ratio: The percentage of earnings paid as dividends. A sustainable payout ratio is typically 30-60%.

How This Calculator Works

1. Stock Price: Enter the current market price of the stock.
2. Annual Dividend: Enter the total annual dividend paid per share.
3. Number of Shares: Enter how many shares you hold or plan to buy.
4. Purchase Price: Enter your average purchase price per share to calculate yield on cost.
5. Dividend Growth: Enter expected annual dividend growth rate for future projections.
6. Projection: See how your dividend income grows over the years with compounding dividend growth.

What is a Good Dividend Yield?

• Low Yield (0-2%): Growth stocks that reinvest profits. Lower income but higher capital appreciation potential.
• Moderate Yield (2-4%): Balanced between income and growth. Most blue-chip stocks fall here.
• High Yield (4-6%): Income-focused stocks. Common in utilities, REITs, and mature companies.
• Very High Yield (6%+): May signal risk — the company might cut dividends. Always verify sustainability.