U.S. · Investing
Dividend yield calculator.
Dividend yield, yield on cost, annual income and the price at which a stock would hit your target yield.
Your numbers
Result
Dividend yield is the cash a stock pays each year divided by what a share costs today. It sounds simple and it is, which is also why it misleads: a stock whose price has collapsed shows a high yield, and a yield based on what you paid long ago can look far better than what a new buyer would get. This calculator gives both numbers side by side, plus the income on your shares and the price at which a stock would pay a yield you want.
How this is calculated
Annual dividend per share is the payment you enter times the payments per year. Dividend yield is annual dividend divided by the current share price. Yield on cost is the same annual dividend divided by what you paid per share. Annual income is the annual dividend times your shares. The price for a target yield is the annual dividend divided by the target. This is plain arithmetic, so there is no regulatory table behind it.
The official sources that matter are about how the dividend is taxed. IRS Publication 550 says qualified dividends get capital-gains rates if you meet a holding period: you must have held the stock for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date. As of 2026-10-26, that is the rule on the IRS page; the calculator itself shows pre-tax figures only, and it uses the dividend you type, so a cut, suspension or special dividend changes the real result.
Worked examples (hypothetical figures, real arithmetic)
Yield and yield on cost. A stock trades at $40 and pays $0.25 each quarter, so $1.00 a year. The dividend yield is $1.00 / $40 = 2.50%. You bought it years ago at $25, so your yield on cost is $1.00 / $25 = 4.00%. A new buyer today gets 2.50%, not 4.00%. With 200 shares your annual dividends are $200.00.
A target yield. For the same $1.00 annual dividend to yield 3%, the price would have to be $1.00 / 0.03 = $33.33. Compare that with the current $40.
A price drop that looks like a raise. If the price falls from $40 to $20 and the dividend stays $1.00, the yield jumps from 2.50% to 5.00% even though nothing improved for the company.
Mistakes people make
- Chasing a high yield. A price that has fallen sharply produces a high yield and may signal a coming cut.
- Using yield on cost to compare stocks. It measures your history, not the stock's value today.
- Annualizing a one-off dividend. A special dividend repeated four times overstates the yield.
- Ignoring the tax holding period. A dividend can be taxed as ordinary income if you do not hold the stock long enough around the ex-dividend date.
Who this is for, and what it does not cover
It is for a quick yield check on a stock or fund paying regular dividends. It does not forecast dividend growth, reinvestment (see the dividend calculator for a Canadian projection with DRIP), payout ratios, or tax on the dividends.
FAQ
How do you calculate dividend yield?
Divide the annual dividend per share by the current share price. A $1.00 annual dividend on a $40 share is a 2.5% yield.
What is yield on cost?
The annual dividend divided by what you originally paid per share. It describes your own return and rises as the company raises its dividend while your cost stays fixed.
Is a higher dividend yield better?
Not necessarily. A high yield can come from a falling share price, and the dividend may be cut. Check whether the payout is covered by earnings or cash flow.
How do I annualize a quarterly dividend?
Multiply the quarterly payment by four. For a monthly payer multiply by twelve.
Are dividends taxed at a special rate?
Qualified dividends can be taxed at capital-gains rates if you meet the holding period of more than 60 days during the 121-day period beginning 60 days before the ex-dividend date, per IRS Publication 550.
Does this include reinvested dividends?
No. It shows a single year of dividends at today’s numbers, before tax and without reinvestment.
Sources
Retrieved 2026-10-26. Each link was opened and checked against the claim next to it.
- IRS Publication 550 (2025), Investment Income and Expenses: qualified dividend holding period: more than 60 days during the 121-day period beginning 60 days before the ex-dividend date.
- IRS Topic no. 404, Dividends: overview of ordinary versus qualified dividends.
Not tax or investment advice
This page is general information, not tax, legal, investment or financial advice. Rules, limits and rates change, and your facts may differ. Trading, options and margin can lose more than you expect. Confirm anything that matters with the IRS, a CPA, an enrolled agent or a registered adviser before you act. Everything runs in your browser; nothing you enter is sent anywhere.
Common mix-ups
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Often assumedEvery dividend my stock pays is taxed at the lower qualified-dividend rate.
What the source saysIRS Publication 550 says qualified dividends also require a holding period: you must have held the stock for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date. Dividends that do not meet it are not qualified dividends. [1]
Checked against these sources on .