Yield on Cost Calculator
See your real dividend yield based on what you actually paid — and project how it grows over the next 30 years as the company keeps raising its payout.
The price you paid per share when you bought
Total dividends paid per share over the last 12 months
Historical CAGR or your assumed future growth rate
Shows current yield as a reference line on the chart
How yield on cost is calculated
The formula is: YOC (year n) = (current dividend × (1 + growth rate)^n) ÷ purchase price. The breakeven year is the first year where YOC exceeds your target threshold (default 8%). If you enter a current stock price, the chart also shows the current yield for new buyers as a reference line — illustrating the compounding advantage of long-term holding.
Frequently Asked Questions
- What is yield on cost and why does it matter?
- Yield on cost (YOC) is the annual dividend divided by the price you originally paid per share — not the current price. It reveals your true return on the capital you deployed. A stock bought years ago at a low price may now yield 10%+ on your cost, even if the current yield for new buyers is only 3%.
- Is yield on cost or current yield more important?
- Both matter for different decisions. Current yield is relevant when deciding whether to buy more shares today. Yield on cost is relevant for evaluating whether to hold existing shares — it shows the real income return on capital already deployed and helps avoid selling compounders prematurely.
- How does dividend growth affect yield on cost over 20 years?
- Significantly. A stock bought at 3% yield that grows its dividend at 7% per year will have a YOC of about 11.6% after 20 years. At 10% annual growth, it reaches ~20% YOC. This is the core power of dividend growth investing — time and consistent raises compound your effective yield dramatically.
- What is a good yield on cost target for retirement income?
- Most dividend growth investors target a portfolio YOC of 6–10% by retirement. At 8% YOC on a €500k portfolio, you'd receive €40k/year in dividends. The breakeven year — when YOC first crosses your target — is a useful milestone to track.
- Should I sell a stock with low current yield but high YOC?
- Generally no, if the dividend is growing and the business is sound. Selling forfeits future compounding and triggers a tax event. The low current yield reflects share price appreciation — but your income stream on the original investment may be exceptional. Sell only if the dividend growth has stalled or the business fundamentals have deteriorated.