Calculate the dividend yield, yield on cost, and annual income from a dividend-paying stock or ETF based on current price, annual dividend, and number of shares held.
Enter Your Numbers
$
The stock’s current market price per share.
$
Total dividends paid per share per year. Multiply the latest quarterly dividend by 4.
shares
Number of shares you hold or plan to purchase.
$
The price you originally paid per share (used for yield-on-cost calculation).
Dividend Yield
4.00%
Annual dividend divided by current share price.
Formula verified 9 September 2026
Yield on Cost
5.00%
Annual dividend divided by your original purchase price — shows your personal income return rate.
Annual Dividend Income
$200.00
Total dividends received per year across all shares.
Quarterly Income
$50.00
Expected dividend income each quarter (most stocks pay quarterly).
Monthly Income (Est.)
$16.67
Annual income divided by 12 — useful for budgeting dividend income monthly.
Yield on cost uses your original purchase price instead of the current price, showing how income has grown relative to your investment basis.
Annual income = Annual Dividend per Share × Shares Owned.
Quarterly and monthly income are derived from annual income for cash flow planning.
Worked Example
You own 100 shares of a stock currently at $50. Annual dividend is $2/share; you originally bought at $40.
Current Price
$50/share
Annual Dividend
$2/share
Dividend Yield
4.00%
Purchase Price
$40/share
Yield on Cost
5.00%
Annual Income (100 shares)
$200
Quarterly Income
$50
Monthly Income (Est.)
$16.67
The stock currently yields 4%, but your yield on cost is 5% because you bought at $40. As dividends grow and your cost basis stays fixed, yield on cost increases over time.
Dividend Yield: Income, Yield on Cost, and the High-Yield Trap
Yield is the dividend divided by the price
Dividend yield is the annual dividend per share divided by the current share price, expressed as a percentage. It tells you how much income each dollar invested today produces — a $2 annual dividend on a $50 share is a 4% yield. The tool also turns that into the cash you would receive each year, quarter, and month for your share count.
Because the price is in the denominator, the yield moves inversely to the share price: when the price falls, the yield rises even if the dividend has not changed at all. That single fact explains most of what follows.
Yield on cost is your personal number
Yield on cost swaps the current price for the price you actually paid. For a long-term holder of a company that has raised its dividend for years, yield on cost can sit well above the current yield — a $2 dividend on shares you bought at $25 is an 8% yield on cost, even if new buyers only get 4% today.
It is a satisfying figure and a fair measure of how your own position is performing, but do not compare it against a fresh purchase’s current yield. For a new buy, only the current yield is the apples-to-apples number.
A high yield is a question, not a verdict
The classic mistake is chasing the highest yield on the screen. Because yield rises as price falls, an unusually high figure — say, above 7 to 8 percent — often means the market expects the dividend to be cut, not that the company is unusually generous. This is the "dividend trap".
Always ask why a yield is high before buying. A second, simpler slip is entering one quarterly payment as the annual dividend; multiply the latest quarterly figure by four (or sum the trailing four payments) for the annual number this tool expects.
Growth and reinvestment beat a high level
A steadily rising payout usually outperforms a high but stagnant one over time, which is why dividend-growth history matters more than today’s headline yield. Companies with long records of consecutive increases tend to be more dependable, though none are guaranteed.
Reinvesting dividends compounds the effect — more shares produce more dividends, which buy more shares. Holding dividend payers inside a tax-advantaged account reduces the tax drag on that income stream.
What this assumes
The calculator holds the dividend constant, which never truly happens — payouts can be raised, cut, or suspended — and it ignores taxes and the compounding from reinvestment. The figures are a snapshot for comparison, not a forecast of guaranteed income.
Dividends are not promised and prices fluctuate. Treat the yields here as a way to line up opportunities, and for decisions that affect your finances consider consulting a qualified professional.
Assumptions & Best Uses
Annual dividend is the most recently declared annual rate (or 4 × the latest quarterly dividend).
The dividend amount is assumed constant. Dividends can be cut, suspended, or increased.
Monthly income is an estimate; most dividend-paying stocks pay quarterly.
Limitations
Dividend payments are not guaranteed and may be reduced or eliminated.
Does not account for taxes on dividends (qualified vs. ordinary income rates).
Does not model dividend reinvestment (DRIP) compounding effect.
Frequently Asked Questions
What is a good dividend yield?
Yields between 2–5% are typical for stable dividend-paying stocks and ETFs. Yields above 7–8% may signal dividend cut risk — this is called a "dividend trap." High-yield bond funds can yield 5–8% with higher credit risk.
What is the difference between yield and yield on cost?
Current yield reflects income relative to today’s price. Yield on cost reflects income relative to what you paid. For long-term holders whose dividends have grown, yield on cost is often much higher than the current yield.
Are dividends guaranteed?
No. Companies can cut or eliminate dividends at any time. Dividend Aristocrats (S&P 500 companies with 25+ consecutive years of dividend increases) offer more stability, but no dividend is legally guaranteed.
How does DRIP affect my income over time?
Dividend reinvestment (DRIP) automatically buys more shares with each dividend, increasing both future dividends and share count. To approximate that compounding effect, you can use the Compound Interest Calculator, treating reinvested dividends like contributions that grow over time.
Why is yield on cost higher than the current yield in the example?
Yield on cost divides the dividend by what you originally paid, while current yield divides it by today’s price. If the share price has risen since you bought, your purchase price is lower than the current price, so the same dividend represents a larger percentage of your cost. As a company raises its dividend over the years, yield on cost tends to climb further.
How do taxes affect dividend income?
In the US, qualified dividends are generally taxed at long-term capital gains rates, while non-qualified (ordinary) dividends are taxed as regular income. Dividends held in tax-advantaged accounts like an IRA are treated differently. This calculator shows pre-tax income, so your after-tax cash flow will be lower depending on your situation.
Sources & References
Figures on this page are checked against primary, authoritative sources. Links open in a new tab.
Returns are assumptions, not guarantees. Actual results may vary because of market performance, taxes, fees, inflation, and timing. This is an educational projection, not investment advice.