What it calculates
net profit = (sell − buy) × shares + dividends − commission
Two hundred shares bought at $48.50 and sold at $57.20 is $1,740 of capital gain. Add $0.62 per share of dividends received while holding — $124 — subtract $2 of commission, and the trade returned $1,862 on $9,700 invested: 19.2%.
Annualising, and why it changes the ranking
A return without a time period cannot be compared to anything.
annualised = (1 + total return)^(365 ÷ days held) − 1
That 19.2% over 180 days annualises to about 42%. The same 19.2% over three years annualises to about 6%. Identical money, entirely different quality of decision — and the second one loses to a savings account after inflation.
This is the single most useful thing on the page for anyone holding more than a handful of positions. It converts "how much did I make" into "how hard was that money working", and the ranking of your own holdings usually changes when you apply it.
One caution: annualising a very short hold produces absurd numbers. A 2% gain over three days annualises to over 1,000%, which describes nothing repeatable. Use it for holds of a month or more.
Total return is the right measure for the holding, not for the decision
Counting dividends as income gives the total return, and that is the correct way to judge whether owning the position paid.
It is the wrong way to judge whether buying it was a good call. A stock that fell 8% while paying a 3% dividend produced a −5% total return: still a loss, and the dividend did not offset the decision, it softened the report. Dividend-heavy portfolios often read better on total return than the underlying share performance justifies, and the gap is worth looking at deliberately rather than letting the kinder number stand in for both.
For a holding measured across several years with reinvestment, the smoother figure is CAGR, which describes the constant rate that would have produced the same ending value.
What is not included
Tax, which varies by jurisdiction, account type and holding period, and can be the largest single deduction. Dividends and capital gains are frequently taxed at different rates, so two identical total returns are not identical after tax.
Currency, if the stock trades in a currency other than your account's. A 20% gain on a US stock in a euro-denominated account is not 20% to you — the currency converter shows the reference rate for any date.
Reinvested dividends, which this page treats as cash income rather than as additional shares.