How it works
Dividend yield relates annual cash distributions per share to a selected share price. Annual mode uses the full annual dividend directly. Periodic mode annualizes one entered payment at the selected frequency.
The formula
Keep currency, units and time periods consistent. Percentage inputs use percentage points (enter 5 for 5%). Results are rounded only for display; tiny nonzero values may use scientific notation. Undefined ratios are shown as unavailable.
A $2.40 annual dividend and $60 share price give a 4.00% yield, or $0.20 per month per share as an average equivalent. A 5% target yield implies $48 mathematically.
Calculation method
Yield on cost uses the original purchase price instead of today’s price. It answers a different question and should not be confused with the current yield available at the selected market price.
Interpretation
The monthly and quarterly equivalents are arithmetic averages, not promised payment dates. A recent payment may be irregular, a special dividend, reduced or discontinued. Enter a representative assumption deliberately.
Limitations
A high yield is not automatically favorable. It can rise because the share price fell. The price implied by a target yield is a ratio calculation, not a recommended purchase price or an assessment of dividend sustainability.
Method and reference sources
Method and content checked 2026-09-20. These sources provide background, not endorsement or professional certification. The formula and limitations above define this calculator.
- Investor.gov — Compound Interest CalculatorGrowth, contribution and time-horizon context; this site does not forecast investment returns.
- Investor.gov — Understanding FeesInvestment fee and compounding context; enter the terms of your fund or account.
Frequently asked questions
Why do current yield and yield on cost differ?
Current yield uses the entered current share price. Yield on cost uses your purchase basis. Both depend on the dividend assumption and neither guarantees future distributions.
What is a worked example for Dividend Yield?
A $2.40 annual dividend and $60 share price give a 4.00% yield, or $0.20 per month per share as an average equivalent. A 5% target yield implies $48 mathematically.