Yield on Cost

Yield on cost can be an effective way to measure your investments progress


How to calculate Current Yield and  Yield on Cost for your Dividend Stocks

Yield on cost can be an effective way to measure your investments progress. There are many ways to measure how well or how poorly your investment is preforming.

Another measure of your investments growth! I have read investor comments that they believe that Yield on Cost (YOC) is a useless metric. I don’t agree.

Here is how to calculate it. It is actually very simple.

Current Yield is the Yield currently being paid by a stock. It is calculated by dividing the stock’s current value by its annual dividend amount.

Yield = Annual Dividend / Current Stock Price.   So if the annual dividend is .80 and its current price is $10 then — .80/10 = .008.

To express it in a percentage multiply the result by 100 = 8%.

.80 / 9.5    = 8.42%

Yield on cost is calculated in the same way except instead of using the stock’s current price you use the original cost of the stock.

So, if you paid $8.00 for the stock and the dividend is .80 cents then your yield on cost would be:

.80 / 8 = .001 x 100 = 10%

Or if the dividend has increased since original purchase:

.90 / 8 = .1125 x 100 = 11.25%

What I like about the yield on cost metric is that I can see what my original investment is earning in terms of my cost. From the example above I can see that my original investment is now returning 3.25% more than it originally was when I purchased it.


Did you find this article helpful, do you comments ? Please post your comments below and share your thoughts with us.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s