Yield on Cost Calculator
Yield on cost (YOC) measures your dividend yield based on what you originally paid for a stock. As companies raise their dividends, your YOC grows — rewarding long-term holders.
Stock Details
What you paid per share
Current annual dividend per share
Expected annual dividend increase
At 7% annual dividend growth, your yield on cost more than doubles from 4.00% to 21.71% in 25 years — without buying another share.
Yield on Cost vs Current Yield
Current yield stays relatively flat because the stock price also appreciates. But your yield on cost — based on your original purchase price — keeps climbing as dividends grow.
Assumes 5% annual price appreciation for current yield comparison. This is for illustration only — not financial advice.
Stop recalculating — track it live
This calculator shows the yield-on-cost of a single position at a point in time. Connect your brokerage to REWD and this updates automatically as your dividends are paid — no re-running the numbers by hand. Free to start; automatic brokerage sync from $9.99/mo.
Yield on cost after 10 years of dividend growth
| Starting yield | 5% div growth | 7% div growth | 10% div growth |
|---|---|---|---|
| 2% starting yield | 3.26% | 3.93% | 5.19% |
| 3% starting yield | 4.89% | 5.90% | 7.78% |
| 4% starting yield | 6.52% | 7.87% | 10.37% |
| 5% starting yield | 8.14% | 9.84% | 12.97% |
What will a 3% yield growing 8% a year be worth in 10 years?
A stock bought at a 3% dividend yield whose payout grows 8% annually reaches a 6.48% yield on cost after 10 years (3% × 1.08^10) and 13.98% after 20 years — meaning your original dollars eventually earn more in annual dividends than many high-yield stocks pay on day one. On a $10,000 cost basis, that is $300 of income in year one growing to about $648 by year 10 and roughly $1,398 by year 20, without adding a single share. This is the core argument for dividend-growth investing over simply buying the highest current yield.
When does a low starting yield beat a high one?
When its dividend grows meaningfully faster. Compare a 2% yielder raising its dividend 10% a year against a 5% yielder raising 2% a year: after 10 years the fast grower's yield on cost is 5.19% versus 6.09% for the slow one, and by year 13 the fast grower pulls ahead (6.90% vs 6.47%) — permanently, since it compounds from a higher rate. The catch is the crossover takes over a decade, and the high yielder pays far more cumulative income early on. Match the choice to your horizon: growers for a 15-plus-year runway, established yield for income you need soon.
Is a high yield on cost a reason to keep holding a stock?
Not by itself. Yield on cost is a scoreboard for a past decision, but every holding competes for capital at today's prices: a position with a 12% yield on cost and a 2.5% current yield can be sold and redeployed into anything yielding more than 2.5% to raise your actual income (taxes on the realized gain aside). The forward-looking questions are the current yield, the dividend growth rate, and payout safety. Where a high yield on cost does earn its keep is as evidence — a company that multiplied its payout for a decade often keeps raising it.
This tool is for educational and informational purposes only and does not constitute investment, financial, tax, or legal advice. Consult a licensed professional before making investment decisions.
Past performance does not guarantee future results. All projections are hypothetical estimates based on user-provided inputs and may differ materially from actual outcomes.
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