# 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
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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.

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