Yield on Cost Calculator

Yield on Cost is a concept whereby you calculate your existing yield vs the share price you paid when you purchased the investment (your cost basis) not the current share price. For people who buy dividend growth stocks (stocks that routinely increase their dividend) the yield on cost metric is a way to measure the annual income or return on your original investment if you hold it for years. If the dividend grows while at the same time you reinvest your dividend you achieve even more compounding of your return. Income investors are especially interested in the metric of yield on cost. If you hope to one day draw your income fully, or in large part, from your investments, you would like to know how much you need to invest today, in order to reach the yield you want in the future. Of course, past performance is no guarantee of future performance, and companies will not always increase their dividend at a linear rate. So sometimes you rely on estimates. To figure out the dividend growth rate of a stock look at average annual dividend increases for the past 10 years, it will not be perfect, but it should give you a good idea.

Starting Yield: %(the current annual dividend yield, such as 4.5)
Dividend Growth Rate: %(the historical average increase in the dividend as a percentage)
Number of Shares Held: (the number of shares you own in the stock)
Cost per Share: $(your purchase price for the shares)
Years to hold: (the number of years for which you want to calculate results)