Dividend Yield Calculator
Calculate dividend yield, yield on cost, and annual income from dividend-paying stocks.
Dividend Yield by Sector (2025 Averages)
| Sector | Avg Yield | Notes |
|---|---|---|
| Utilities | 3–5% | Stable, regulated income |
| Real Estate (REITs) | 4–6% | Required to distribute 90% of income |
| Consumer Staples | 2–4% | Dividend aristocrats common |
| Energy (Oil & Gas) | 3–5% | Variable with commodity prices |
| Technology | 0.5–1.5% | Growth-focused, lower yields |
Frequently Asked Questions
What is dividend yield?
Dividend yield = Annual Dividend Per Share / Current Stock Price × 100%. It shows how much a company pays in dividends each year relative to its current stock price. A $2.40 annual dividend on a $60 stock gives a 4% yield. Yield changes as the stock price moves — if the stock price falls, yield rises (assuming the dividend stays constant).
What is a good dividend yield?
A 'good' yield depends on context. S&P 500 average dividend yield has historically been around 1.5–2.5%. Utility stocks and REITs often yield 3–6%. Yields above 6–7% can signal elevated risk — sometimes a high yield indicates the market expects a dividend cut. Dividend growth investors often prefer lower-yielding stocks (2–3%) that consistently increase their dividend by 5–10% annually.
What is yield on cost?
Yield on cost = Annual Dividend Per Share / Your Purchase Price × 100%. Unlike current yield, it does not change with market price — it shows your personal income return relative to what you paid. If you bought a stock at $30 that now pays $2.40/year, your yield on cost is 8% — even if the current yield (based on today's $60 price) is only 4%. Long-term dividend investors focus on yield on cost.
What is a dividend payout ratio?
The payout ratio = Annual Dividend Per Share / Earnings Per Share × 100%. It shows what percentage of earnings is paid as dividends. A payout ratio below 60% is generally considered sustainable. Very high payout ratios (above 80–90%) may indicate dividends are at risk of being cut. Very low payout ratios (below 30%) suggest room for dividend growth.
What is DRIP investing?
DRIP (Dividend Reinvestment Plan) automatically reinvests dividends to purchase additional shares, compounding returns over time. Instead of receiving cash, your dividends buy fractional shares at the current price. Over decades, this significantly boosts total returns. Many brokers and companies offer DRIPs free of charge. Reinvesting a 3% yield annually adds meaningfully to long-term wealth.