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Dividend Yield Calculator

Yield alone cannot tell you whether a dividend is generous or in trouble. Enter the earnings too and the payout ratio answers the question yield cannot.

The holding

Your entry and the company

To see yield on cost — what the dividend pays on the money you actually put in.
To see the payout ratio, which is what tells you whether the dividend is safe.
Dividend yield—
Yield on your costenter your cost
Annual income—
Per quarter—
Payout ratioenter EPS
Value of the holding—

A high yield is as often a falling price as a generous dividend — the yield rises when the denominator falls. Check the payout ratio and the direction of the share price before treating a large number as good news.

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Three yields, and they answer different questions

dividend yield  = annual dividend ÷ current price
yield on cost   = annual dividend ÷ the price you paid
payout ratio    = annual dividend ÷ earnings per share

Yield is what a new buyer gets today. It is the comparison number — the only one that puts this holding next to any other.

Yield on cost is what your own purchase pays you. A stock bought at $38 now paying $2.10 yields 5.5% on your money while showing 4.0% on the screen. It is a satisfying number and it is not a decision input: it says something about the past, and the capital in the position is worth today's price, not what you paid.

Payout ratio is the safety check, and it is the one this page treats as primary.

Why a high yield is usually bad news

Yield is a fraction with price on the bottom. It rises when the dividend rises — and it rises identically when the price falls.

Sort any screener by yield and the top of the list is mostly companies whose shares have dropped hard, often because the market expects the dividend to be cut. The yield shown is calculated from a payment that may not be made again. This is the yield trap, and it is not rare: it is the default condition of high-yield screens.

The payout ratio separates the two cases:

Payout ratio Reading
Under 40% Comfortable, room to grow the dividend
40–60% Normal for a mature profitable company
60–80% Little room for a weak year
Over 80% Fragile outside utilities and REITs, where it is structural
Over 100% Paying out more than it earns — funded by cash, debt or asset sales

What the ratio does not catch

Earnings are an accounting figure and dividends are paid in cash, so the two can diverge for years. A company with heavy non-cash charges can show a payout ratio above 100% and cover the dividend comfortably from cash flow; another can look safe on earnings and be borrowing to pay.

For a serious check, compare the dividend against free cash flow rather than earnings. REITs are the clearest case — they are legally required to distribute most of their income and are properly assessed on funds from operations, not EPS, so a payout ratio above 100% there is normal rather than alarming.

FAQ

How do I calculate dividend yield?

Divide the annual dividend per share by the current share price. A $2.10 dividend on a $52.40 share is 4.01%. Use the trailing twelve months of dividends unless the company has announced a change.

What is yield on cost?

The annual dividend divided by the price you originally paid. It rises over time if the dividend grows, which makes it a pleasant measure of a long-held position — and a poor basis for a decision, since the capital tied up is worth the current price.

What is a good dividend yield?

Broad market averages sit around 1.5–2.5%, with income-focused sectors nearer 4–6%. Anything far above its sector norm deserves the payout ratio checked first: unusually high yields are more often a warning than an opportunity.

Is a high payout ratio bad?

Above roughly 80% it leaves little room for a weak year, and above 100% the dividend is not covered by earnings. Utilities and REITs run high ratios by design, so compare within the sector rather than against a single threshold.

Does dividend yield include special dividends?

It should not, if you want a forward-looking figure. A one-off special payment inflates the trailing yield and will not repeat. Use the regular dividend rate and treat specials separately.

This is the plan. What did you actually do?

A calculator tells you the size you should have taken. It cannot tell you the size you took at 2pm after two losers, or how often your stop moved once price went against you. Drop in a statement from MT4/MT5, a broker CSV or a crypto export and see the answer for your own last 90 trades.

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