What the Dividend Yield Calculator does
This dividend yield calculator divides a share's annual dividend by its price to give the dividend yield, from either the regular payment and how often it is paid, or the actual payments over the last twelve months. Add your own holding and it also shows yield on your cost, the payout ratio against earnings per share, the income per payment and per year.
An optional projection grows the dividend and the share price at rates you choose and, if you want, reinvests every payment in more shares, so you can see how income builds over time. Nothing is fetched: you enter the price and dividend, which keeps the result honest about how current it is.
How to use it
- Enter the current share price and either the dividend per payment with the number of payments a year, or the actual payments of the last twelve months.
- Optionally add how many shares you hold, what you paid for each, and the earnings per share to see yield on cost and the payout ratio.
- Open the projection section to grow the dividend and price at chosen rates for a number of years, with or without reinvestment.
- Read the yield, check the notes on payout ratio and unusually high yields, and download the projection table if useful.
Reading the results
A forward yield uses the current payment rate multiplied up to a year; a trailing yield adds up what was actually paid in the last twelve months. They differ when a company has just raised or cut its dividend, or pays special dividends.
Yield on cost compares today's dividend with the price you paid. It rises as the dividend grows but says nothing about whether the share is a good holding today - for that, the current yield is the comparable number.
The payout ratio shows what share of profits is paid out. A very high ratio leaves little for reinvestment or a bad year; above 100% means the dividend is not covered by earnings.
Worked example: a quarterly payer at 80
A share trades at 80 and pays 0.60 every quarter. The annual dividend is 0.60 x 4 = 2.40, so the dividend yield is 2.40 / 80 = 3.00%.
An investor who bought 100 shares at 60 has a yield on cost of 2.40 / 60 = 4.00% and receives 240 a year, 60 per payment. With earnings of 4.00 per share, the payout ratio is 2.40 / 4.00 = 60%.
To see reinvestment by hand, take a simpler case: one annual payment of 2.40 and a price that stays at 80. Year 1 pays 240, which buys 3 more shares, making 103. Year 2 pays 103 x 2.40 = 247.20, buying 3.09 shares for a total of 106.09. The projection table does the same arithmetic payment by payment.
Formulas and scoring rules
- Annual dividend
D = dividend per payment x payments a year, or the sum of the last 12 months' payments- Dividend yield
yield = D / share price- Yield on cost
yield on cost = D / your cost per share- Payout ratio
payout = D / earnings per share- Reinvestment
shares after a payment = shares + shares x (D / f) / priceDividend and price step up once a year by the growth rates you enter. Shown to 2 decimals.
Why a high dividend yield can be a warning
Yield rises when the price falls. If a share's price drops because investors expect weaker profits, the yield on the last dividend looks attractive just when that dividend is most at risk. A yield far above similar companies is a reason to read the latest results, not a signal on its own.
Check whether the dividend is covered by earnings and by cash flow, whether it has been cut before, and whether the last twelve months included a one-off special payment that will not recur.
Limitations: what the result does not prove
- It uses the price and dividends you enter. It has no market data, and a yield is out of date as soon as the price moves.
- Withholding tax, dividend tax, dealing costs and currency conversion are not deducted.
- The projection uses constant growth rates you choose and fractional shares. Real dividends can be cut and prices fall.
- It is not a recommendation to buy or sell any share.
Privacy: where your data goes
Everything you paste, type or drop is processed in this browser tab. It is not uploaded, logged, stored or sent to analytics. Session recording and tag-manager scripts are switched off on this page.
Standards and sources
Frequently asked questions
How do I calculate dividend yield?
Add up the dividends per share for a year and divide by the current share price. A share at 80 paying 0.60 a quarter yields 2.40 / 80 = 3%. Enter the per-payment amount and frequency, or the actual last twelve months' payments, and the page does it.
What is the difference between trailing and forward dividend yield?
Trailing yield uses the dividends actually paid over the past twelve months. Forward yield takes the latest payment rate, or an announced one, and multiplies it up to a year. After a dividend rise, forward yield is the higher; after a cut, trailing yield looks misleadingly high.
What does yield on cost mean?
It is the current annual dividend divided by the price you originally paid. If you bought at 60 and the dividend is now 2.40, your yield on cost is 4%, even though a new buyer at 80 gets 3%. It measures how your income has grown, not the share's current value.
What is a healthy payout ratio?
It depends on the industry. Utilities and property companies often pay out most of their earnings; growing firms keep more. A ratio above 100% means the dividend exceeds earnings, which cannot continue for long without borrowing or drawing on reserves.
How much does reinvesting dividends add?
Each reinvested payment buys shares that earn their own dividends, so income compounds. Open the projection, tick reinvest and compare the income column with the cash option - the gap widens every year, more so when the dividend grows.
Why doesn't the calculator look up the share price for me?
It deliberately works only with figures you provide, so nothing about your holdings leaves your browser and the page never presents stale or unverified market data as current. Take the latest price and dividend from your broker or the company's announcements.
Last reviewed by the A2Z.Tools team against the sources listed above.
