Calculate the annual return on investment for any dividend-paying stock.
Calculated Dividend Yield
0.00%
What is Dividend Yield?
The dividend yield is a financial ratio that tells you how much a company pays out in dividends each year relative to its stock price. It is expressed as a percentage and represents the "cash flow" return for every dollar invested in the stock, excluding capital gains.
How to Calculate Dividend Yield
The formula for dividend yield is straightforward:
Dividend Yield = (Annual Dividend Per Share / Current Share Price) × 100
Real-World Example
Suppose you are looking at Company A. The stock is currently trading at $120.00 per share. The company pays a quarterly dividend of $0.90, which totals $3.60 per year.
Annual Dividend: $3.60
Share Price: $120.00
Calculation: ($3.60 / $120.00) × 100 = 3.00%
Why Dividend Yield Matters
For income-focused investors, such as retirees or those seeking passive income, the dividend yield is a critical metric. A high yield can indicate a lucrative income stream, but it can also be a "dividend trap" if the stock price has fallen due to financial trouble. Conversely, a low yield might indicate a fast-growing company that prefers to reinvest its earnings rather than pay them out to shareholders.
function calculateDividendYield() {
var annualDiv = document.getElementById("annualDividend").value;
var price = document.getElementById("sharePrice").value;
var resultDiv = document.getElementById("yield-result-container");
var yieldDisplay = document.getElementById("yieldResult");
var messageDisplay = document.getElementById("yieldMessage");
// Convert to numbers
var divValue = parseFloat(annualDiv);
var priceValue = parseFloat(price);
// Basic Validation
if (isNaN(divValue) || isNaN(priceValue) || priceValue 10) {
message = "This is an exceptionally high yield. Be sure to check the company's payout ratio to ensure the dividend is sustainable.";
} else if (yieldPercent > 4) {
message = "This is a strong yield, often found in mature sectors like Utilities or Real Estate Investment Trusts (REITs).";
} else if (yieldPercent > 2) {
message = "This is a moderate yield, common among established 'Blue Chip' companies.";
} else {
message = "This is a lower yield, typical for growth-oriented stocks that reinvest most of their earnings.";
}
messageDisplay.innerHTML = message;
}