How dividend yield is calculated
Dividend yield turns a dollar payout into a percentage so you can compare income across stocks that trade at very different prices. You take the total dividends a share pays over a year and divide by the current share price, then multiply by 100.
Because the share price sits in the denominator, the yield moves whenever the price moves. A falling price pushes the yield up even if the company has not changed its payout, and a rising price pulls the yield down. The dividend figure used here is the per-share annual amount, so if a company pays quarterly you would add up the four quarters first.
Reading your result
The headline percentage is the income return on the price you would pay today. A 5% yield means you receive roughly $5 a year in dividends for every $100 invested, before tax and before any change in the share price itself.
If you enter the number of shares you own, the tool also shows your projected annual income — simply the per-share dividend multiplied by your share count. That figure assumes the dividend stays the same over the next year.
Tips for using yield well
Yield is one input, not a verdict. A few things to keep in mind:
- Compare yields within the same sector; utilities and REITs naturally yield more than fast-growing tech names.
- Check whether the company can afford the payout by looking at the payout ratio (dividends divided by earnings).
- Total return combines yield with price growth — a modest yield plus rising shares can beat a high yield that is shrinking.
- An unusually high yield is sometimes a warning sign that the market expects the dividend to be cut.
Caveats
This calculator uses the dividend figures you enter and assumes they hold steady; real dividends can be raised, cut, or suspended at any time. It does not account for taxes on dividend income, which vary by country and account type.
Treat the result as an estimate for comparison, not a guaranteed return or investment advice. Do your own research or speak to a qualified financial professional before investing.
Formula
dividend yield = annualDividendPerShare / sharePrice · 100