Calculate capital gains yield (CGY) from purchase and current price, plus total return, annualized yield, and the sale price needed for a target gain.
Capital Gains Yield Formula
- CGY is the capital gains yield (%)
- P1 is the current or sale price per share ($)
- P0 is the original purchase price per share ($)
The calculator’s default mode applies this formula directly: enter the purchase price and the current or sale price, and it returns the capital gains yield along with the dollar gain per share. If the price fell, the yield is negative.
The second and third modes rearrange the same formula to solve backward:
The first rearrangement finds the sale price you would need to hit a target yield. The second finds the purchase price that would have produced a given yield at today’s price, which is useful for setting a limit order entry point.
The advanced options in the default mode add two related measures. If you enter dividends received per share, the calculator reports the dividend yield on cost and the total return:
If you enter a holding period in years (n), it also reports the annualized capital gains yield, which converts the total price change into a compound yearly rate:
Gains Needed to Recover a Loss
Capital gains yield is asymmetric: a loss requires a larger percentage gain to get back to the original purchase price, because the recovery is measured from a smaller base. The required recovery yield equals the loss divided by what remains. This table shows the capital gains yield needed to break even after a given negative yield.
| Capital gains yield (loss) | Price after loss (from $100) | CGY needed to break even |
|---|---|---|
| -5% | $95 | +5.26% |
| -10% | $90 | +11.11% |
| -20% | $80 | +25% |
| -30% | $70 | +42.86% |
| -40% | $60 | +66.67% |
| -50% | $50 | +100% |
| -75% | $25 | +300% |
The next table shows how capital gains yield and dividend yield typically combine into total return for common investment types. Growth investments deliver most of their return through price appreciation, while income investments deliver more through dividends.
| Investment type | Typical CGY share of return | Typical dividend yield |
|---|---|---|
| Growth stocks (no dividend) | Nearly 100% | 0% to 0.5% |
| Broad market index (S&P 500, long run) | Roughly 70% to 80% | 1.5% to 2% |
| Dividend/utility stocks | Roughly 40% to 60% | 3% to 5% |
| REITs | Often under 50% | 3% to 6% |
Example Problems
Example 1: basic capital gains yield. You buy a share for $100 and it now trades at $120.
- Capital gain per share = $120 – $100 = $20
- CGY = ($20 / $100) * 100 = 20%
Enter 100 as the purchase price and 120 as the current price in the default mode, and the calculator returns 20%.
Example 2: annualized capital gains yield. You buy at $50 and sell at $80 after 3 years.
- Total CGY = (($80 – $50) / $50) * 100 = 60%
- Annualized CGY = ((80 / 50)^(1/3) – 1) * 100 = 16.96% per year
Open the advanced options, enter 3 for the holding period, and the calculator adds the annualized figure to the results table. Note that the annualized rate is lower than 60% / 3 = 20% because compounding is applied.
Frequently Asked Questions
What is the difference between capital gains yield and total return?
Capital gains yield counts only the change in price. Total return adds any income the investment paid, such as dividends on a stock or interest on a bond. A stock that rises from $100 to $105 and pays $3 in dividends has a 5% capital gains yield but an 8% total return. Comparing investments on CGY alone understates the performance of anything that pays significant income.
Can capital gains yield be negative?
Yes. If the current or sale price is below the purchase price, the formula produces a negative percentage, which is a capital loss expressed as a yield. A negative CGY can still coexist with a positive total return if dividends received were larger than the price decline.
Does capital gains yield tell me how much tax I owe?
No. The yield is a percentage measure of price appreciation, not a tax figure. Tax is generally owed on the realized dollar gain when you sell, and the rate depends on your jurisdiction and how long you held the investment; in the United States, gains on assets held more than one year usually qualify for lower long-term capital gains rates than short-term gains. Unrealized gains on shares you still hold are typically not taxed.