Enter the dividend amount, dividends payments per year, and the initial share price into the calculator to determine the stock yield.

Stock Yield Formula

The following formula is used to calculate a stock yield.

SY = DA * DPY / SP
  • Where SY is the stock yield
  • DA is the dividend payment amount
  • DPY is the dividend payments made per year
  • SP is the initial share price

The dividend payment amount refers to the sum of money a company pays to its shareholders as a distribution of profits.

Dividend payments made per year refers to the frequency at which a company distributes profits to its shareholders in the form of cash or additional shares.

The initial share price refers to the price at which a company’s shares are first offered to the public for trading on a stock exchange.

Stock Yield Definition

What is a stock yield? A stock yield is a ratio of the total dividends paid per year over the initial share price of the stock. This term is also often used interchangeably with dividend yield.

Example Problem

How to calculate stock yield?

  1. First, determine the dividend payment amount.

    For this example, the stock pays out $25.00 per dividend period.

  2. Next, determine the number of payments made each year.

    Typically, shares will pay our dividends on a quarterly, semi-annual, or annual basis. For this problem, the dividends are paid quarterly which means 4 times per year.

  3. Next, determine the initial share price.

    These shares were purchased at a price of $250.00.

  4. Finally, calculate the stock yield.

    Using the formula above, and the information from previous steps, the stock yield is found to be (25*4)/250 = 100/250 = .40 = 40%.

About Stock Yield

What is the stock yield percentage? A stock yield percentage is simply the stock yield, or the dividend yield expressed as a percentage instead of a ratio. To achieve this, multiply the result from the formula above by 100.

How often are yields paid? Dividends can be paid out in any frequency a company sees fit, but the most common are quarterly, semi-annually, and annually.

What is a good stock yield? Any stock yield above .03 or 3% is considered an exceptional stock yield.

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stock yield formula