How to use the Dividend Yield Calculator
- Enter the current share price.
- Enter the total dividend paid per share over a year.
- Enter the number of shares you hold.
- Read the yield, annual income, monthly average and value of the holding.
Formula used
Dividend yield = annual dividend per share ÷ share price × 100. Annual income = dividend per share × number of shares.
Worked example
Here is the Dividend Yield Calculator worked through with the example values shown above, so you can check each step by hand.
| Inputs | |
|---|---|
| Share price | $50 |
| Annual dividend per share | $2 |
| Number of shares | 200 |
| Result | |
| Dividend yield | 4% |
| Annual dividend income | $400.00 |
| Average per month | $33.33 |
| Value of the holding | $10,000.00 |
Yield at different share prices
For the default dividend of 2 per share a year and 200 shares.
| Share price | Dividend yield | Value of the holding |
|---|---|---|
| $25 | 8% | $5,000.00 |
| $40 | 5% | $8,000.00 |
| $50 | 4% | $10,000.00 |
| $60 | 3.33% | $12,000.00 |
| $80 | 2.5% | $16,000.00 |
| $100 | 2% | $20,000.00 |
The calculation
Yield = annual dividend per share ÷ share price. A share priced at $50 that pays $2 a year yields 4%. If you hold 200 shares, annual dividend income is $400 and the average per month is $33.33, on a holding worth $10,000.
Add up the dividends over the last twelve months to get the annual figure, or use the company’s stated annual rate, noting whether it is trailing (past) or forward (expected).
Price moves change the yield
The yield rises when the price falls, if the dividend stays the same. At $25 the same $2 dividend gives 8%, and at $100 it gives 2%. This is why an unusually high yield can be a warning: the market may expect the dividend to be cut.
The yield you earn on shares you already hold depends on what you paid, not the current price. That is called yield on cost.
What the yield does not tell you
A high yield is not the same as a good investment. Total return includes price changes as well as dividends, and companies can raise, cut or stop dividends. Payout ratio, earnings stability and debt are also worth checking.
Dividends may be taxed, and some countries withhold tax on dividends from foreign companies. The figures here are before tax.
Using it for income planning
To estimate the capital needed for a target income, divide the income by the yield. At a 4% yield, $10,000 a year needs a portfolio of $250,000. Diversifying across companies lowers the effect of any single cut.
This is an illustration, not a recommendation to buy any security. Check current figures from the company or your broker.
Frequently asked questions
What is dividend yield?
The annual dividend per share as a percentage of the share price.
What is a good dividend yield?
There is no single answer. It depends on the market, the sector and the safety of the dividend. Very high yields can signal risk.
Is the yield guaranteed?
No. Companies can change or stop dividends at any time, and the share price moves daily.
How do I find the annual dividend?
Add the dividends paid over the last twelve months, or multiply the latest quarterly dividend by four.
Is the income taxed?
Often yes, depending on your country and account. The figures here are gross, before any tax.
Does it include reinvesting dividends?
No. It is a simple yield at the current price. For growth with reinvestment, use the compound interest calculator.
This calculator gives estimates for information only. Actual figures from a bank, employer, tax authority or doctor may differ. It is not financial, tax, legal or medical advice.