Mortgage Refi Calculator

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Investment Yield Calculator

Result Summary

Current Yield:

0.00%

Yield on Cost:

0.00%

Total Capital Gain:

$0.00

Annualized ROI:

0.00%

function calculateYield() { var cost = parseFloat(document.getElementById('initialCost').value); var income = parseFloat(document.getElementById('annualIncome').value); var currentVal = parseFloat(document.getElementById('currentValue').value); var years = parseFloat(document.getElementById('yearsHeld').value); if (isNaN(cost) || isNaN(income) || isNaN(currentVal) || isNaN(years) || cost <= 0 || years <= 0) { alert("Please enter valid positive numbers for all fields."); return; } // Yield on Cost: (Annual Income / Original Cost) * 100 var yieldOnCost = (income / cost) * 100; // Current Yield: (Annual Income / Current Value) * 100 var currentYield = (income / currentVal) * 100; // Capital Gain var capGain = currentVal – cost; // Total Return = (Gain + Total Income over years) var totalIncomeReceived = income * years; var totalProfit = capGain + totalIncomeReceived; // Annualized ROI (CAGR-style calculation for total return) var totalReturnRatio = (currentVal + totalIncomeReceived) / cost; var annualizedRoi = (Math.pow(totalReturnRatio, 1 / years) – 1) * 100; document.getElementById('currentYieldRes').innerText = currentYield.toFixed(2) + "%"; document.getElementById('yieldOnCostRes').innerText = yieldOnCost.toFixed(2) + "%"; document.getElementById('capGainRes').innerText = "$" + capGain.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('annualRoiRes').innerText = annualizedRoi.toFixed(2) + "%"; document.getElementById('yieldResults').style.display = 'block'; }

Understanding Investment Yield

Investment yield is a crucial metric for any investor looking to generate cash flow from their assets. Unlike total return, which includes price appreciation, yield focuses specifically on the income an investment generates relative to its value or cost.

Common Types of Investment Yield

  • Dividend Yield: Calculated by dividing the annual dividend per share by the stock's price. It tells you how much cash flow you're getting for every dollar invested in a stock.
  • Rental Yield: Used in real estate to measure the annual rent collected against the property value. It helps landlords compare different properties' income potential.
  • Bond Yield: The interest rate paid by a bond issuer to the bondholder, often referred to as the "coupon rate."
  • Yield on Cost (YOC): This measures the current income against the original price paid for the asset, showing how your income has grown relative to your initial outlay.

How to Calculate Yield

The basic formula for yield is straightforward:

Yield = (Annual Income / Asset Value) × 100

Yield vs. Total Return

It is important not to confuse yield with total return. While yield represents the "bird in the hand" (the cash you receive), total return accounts for yield plus the change in the market price of the asset. For example, a stock might have a high 10% dividend yield, but if the share price drops by 15%, your total return for the year is actually -5%.

Example Calculation

Suppose you purchased 100 shares of a company for $5,000 ($50 per share). The company pays an annual dividend of $2.50 per share, totaling $250 per year.

A year later, the stock price has risen to $60 per share (total value $6,000).

  • Yield on Cost: ($250 / $5,000) = 5.00%
  • Current Yield: ($250 / $6,000) = 4.17%
  • Capital Gain: $1,000
  • Annualized ROI: In this scenario, your total return includes the $1,000 gain plus $250 in dividends, resulting in a 25% return for the year.

Why Use an Investment Yield Calculator?

Using a yield calculator allows investors to normalize different types of investments to see which provides the best income stream. Whether you are comparing high-dividend stocks, REITs, or municipal bonds, calculating the yield helps you make data-driven decisions for your portfolio's income requirements.

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