Yield on Cost Calculator
Yield on cost is the dividend you get today divided by the price you paid. Enter your purchase price and the current dividend (or pick a ticker to load it live) to compare your yield on cost with today's yield, and see how many years until it reaches a target. Example: KO bought at $42.40 in Oct 2016 now pays $2.12 a year, a yield on cost of 5.00% against 2.21% for a buyer today.
KO The Coca-Cola Company
$96.03 · $2.12/yr dividend · 2.21% yield · quarterly
Your yield on cost
5.00%
$2.12 ÷ $42.40 paid
Today's yield
2.21%
$2.12 ÷ $96.03 price
Your annual income
$212.00
$17.67 a month on $4,240 invested
Years until 8% yield on cost
10.8 yrs
Around 2037 at 4.46% growth a year
Your yield on cost if the dividend grows 4.46% a year
Same shares, no reinvestment, one raise a year. The dashed line is your 8% target.
| Year | Dividend / share | Yield on cost |
|---|---|---|
| Today | $2.12 | 5.0% |
| 2027 | $2.21 | 5.2% |
| 2028 | $2.31 | 5.5% |
| 2029 | $2.42 | 5.7% |
| 2030 | $2.52 | 6.0% |
| 2031 | $2.64 | 6.2% |
| 2032 | $2.75 | 6.5% |
| 2033 | $2.88 | 6.8% |
| 2034 | $3.01 | 7.1% |
| 2035 | $3.14 | 7.4% |
| 2036 | $3.28 | 7.7% |
| 2038 | $3.58 | 8.4% |
| 2041 | $4.08 | 9.6% |
| 2046 | $5.07 | 12.0% |
| 2051 | $6.31 | 14.9% |
| 2056 | $7.85 | 18.5% |
A projection, not a forecast: real raises vary year to year and can stop. Reinvesting dividends raises your income further. Model reinvestment in the DRIP calculator →
Worked example: Coca-Cola (KO) bought 10 years ago
KO closed at $42.40 on Oct 31, 2016. Its dividend over the 12 months before that was $1.38 a share, a yield of 3.25% at the time. As of Nov 10, 2026, KO pays $2.12 a year, so someone who bought on that day now earns $2.12 ÷ $42.40 = 5.00% on their original cost. A new buyer at today's $96.03 gets 2.21%.
The dividend grew about 4.4% a year over the decade. 100 shares bought for $4,240 now pay $212 a year without adding a dollar. If the dividend keeps growing at its 5-year rate of 4.5%, that yield on cost reaches 8% in about 10.8 more years.
Yield on cost formula
Yield on cost = current annual dividend per share ÷ your cost per share × 100
Cost per share = total amount paid (including reinvested dividends) ÷ shares owned
Years to reach a target = ln(target ÷ current yield on cost) ÷ ln(1 + dividend growth)
Today's yield uses the same dividend divided by today's price. The gap between the two is the share price gain since you bought. Yield on cost only rises when the dividend does, which is why it is the favorite number of dividend growth investors.
How long until your yield on cost hits 5%, 6%, 8% or 10%?
Years needed from a 3% starting yield, by dividend growth rate. No reinvestment; raises compound once a year.
| Dividend growth | to 5% | to 6% | to 8% | to 10% |
|---|---|---|---|---|
| 3% a year | 17.3 yrs | 23.4 yrs | 33.2 yrs | 40.7 yrs |
| 5% a year | 10.5 yrs | 14.2 yrs | 20.1 yrs | 24.7 yrs |
| 7% a year | 7.6 yrs | 10.2 yrs | 14.5 yrs | 17.8 yrs |
| 10% a year | 5.4 yrs | 7.3 yrs | 10.3 yrs | 12.6 yrs |
Growth matters more than the starting yield over long holds. A 3% yield growing 10% a year passes a 6% yield growing 3% a year after about 11 years. Stocks with long raise streaks are on the Dividend Aristocrats and Dividend Kings lists.
What yield on cost doesn't tell you
Yield on cost is backward-looking. It tells you how far your income has come, not whether the stock is still a good place for your money. If a stock you bought at $40 now trades at $120 with a 2% yield, the position is worth $120 a share to you, and 2% is what that money earns. Use yield on cost to track progress and today's yield (plus the dividend's safety and growth) to decide whether to hold. Check a holding's current yield with the dividend yield calculator.
Next steps
- Reinvesting dividends raises yield on cost faster. Model it in the DRIP calculator.
- See your income per payment and after tax in the dividend calculator.
- Track every holding's yield on cost automatically in a SmarterDividends portfolio.
Dividend growth facts
Data as of · Source: SmarterDividends data
- As of Nov 10, 2026, 110 U.S.-listed stocks in SmarterDividends' data have raised their dividend for 25 or more consecutive years.
- In the 30 days to Nov 10, 2026, 150 U.S.-listed companies raised their regular dividend and 3 cut it, by ex-dividend date. That is 50.0 increases for every cut.
- As of Nov 10, 2026, the median forward dividend yield among U.S.-listed dividend-paying stocks with a market value of at least $500 million is 2.50%.
Cite this page
SmarterDividends, "Yield on Cost Calculator," updated Nov 10, 2026, https://smarterdividends.com/calculators/yield-on-cost-calculator
Frequently asked questions
What is yield on cost?
Yield on cost is the annual dividend you receive now divided by the price you originally paid per share. If you bought at $40 and the stock now pays $2.40 a year, your yield on cost is 6%, even if a new buyer at today's $80 price gets only 3%. It measures how much dividend growth has raised the income on your original money.
How do you calculate yield on cost?
Divide the current annual dividend per share by your cost per share and multiply by 100. If you bought in several lots, use your average cost: total amount paid ÷ total shares. Example: 150 shares bought for $6,000 in total is $40 a share; at a $2.40 dividend that is a 6% yield on cost.
What is a good yield on cost?
There is no fixed bar, because it depends on what you started with and how long you held. A 3% starter yield growing 7% a year becomes a 6% yield on cost in about 10 years and 12% in about 20. Many long-term dividend growth investors aim for a yield on cost of 8% to 10% after 15 to 20 years.
How long does it take to double my yield on cost?
Divide 72 by the dividend growth rate for a quick estimate. The exact answer is ln(2) ÷ ln(1 + growth): 14.2 years at 5% growth, 10.2 years at 7% and 7.3 years at 10%. The calculator above shows the year your yield on cost reaches any target.
Should I include reinvested dividends in my cost?
Yes, if you want a true figure. Reinvested dividends buy new shares at later, usually higher, prices, so they raise both your share count and your total cost. Use total cost ÷ total shares as the purchase price. Leaving them out overstates yield on cost.
Is yield on cost a useful metric?
It is a good measure of how your income has grown, but a poor guide for deciding whether to hold. The money tied up in the stock is worth today's market value, so the yield you could earn by selling and buying something else is today's yield, not your yield on cost. Use both numbers: yield on cost for progress, today's yield for decisions.
Can yield on cost go down?
Yes. A dividend cut lowers it straight away: a 6% yield on cost becomes 3% if the dividend is halved. Buying more shares at a higher price also lowers it, because your average cost rises. A falling share price alone does not change it.
For education and planning only, not investment, tax or legal advice. Projections assume constant growth rates; real dividends, prices and tax rules change.