ReturnLab

Dividend Yield Calculator

The cash-return side of a stock, separate from price appreciation.

Annual dividend per share

Current share price

Dividend yield

What you entered

Annual dividend per share: $2Share price: $50

1
Divide the annual dividend by the share price
$2.00 ÷ $50.00= 4.00%

Result

Dividend yield: 4%

A stock paying $2/share annually at a $50 price yields 4% — that's the cash return before any price appreciation.

Dividend yield at common share prices and payouts

Yield is the annual dividend per share divided by the current share price. Each row runs one pairing through that division.

Annual dividend per share	Share price	Dividend yield
$0.50	$50	1.00%
$1.00	$50	2.00%
$1.50	$50	3.00%
$2.00	$50	4.00%
$2.00	$100	2.00%
$3.00	$100	3.00%
$4.00	$100	4.00%
$5.00	$80	6.25%
$6.00	$75	8.00%

Yield moves inversely with price, so a falling share price raises the quoted yield without the company paying a cent more. That is why an unusually high yield is often a warning rather than a bargain - the market may be pricing in a dividend cut, and a cut resets the yield to whatever the new payout supports. Check the payout ratio and whether the dividend has actually been declared for the coming year. This is trailing yield on the stated annual dividend; it is not total return, which also includes any change in the share price.

Yield vs. total return

Dividend yield only measures cash income — it says nothing about whether the share price is rising or falling. A high yield can sometimes signal a falling stock price, not a generous payout.

Yield changes with price

Dividend yield moves inversely with share price even if the dividend itself never changes — a stock that drops 20% in price sees its yield rise by roughly the same proportion.

What makes a dividend sustainable

Check the payout ratio — dividends paid ÷ earnings per share. A payout ratio under 60% is generally sustainable; above 80% is risky because the company has little margin for earnings declines. REITs are an exception — they're required to distribute 90%+ of income, so high payout ratios are normal for them.

Frequently asked questions

How do you calculate dividend yield?

Dividend Yield = Annual Dividend per Share ÷ Current Share Price × 100. A stock paying $3.00/year in dividends at a $75 share price has a 4.0% yield (3.00 ÷ 75 × 100). Use the trailing twelve months of actual dividends paid, not a single quarter annualized.

What is a good dividend yield?

The S&P 500 average is about 1.3-1.5%. A yield of 3-5% is considered good for income investors. Yields above 6-7% are often warning signs — the high yield may reflect a falling stock price rather than a generous payout. Always check the payout ratio to see if the dividend is sustainable.

Are dividends taxed?

In the US, qualified dividends (from stocks held 60+ days) are taxed at 0%, 15%, or 20% depending on your income bracket — the same favorable rates as long-term capital gains. Non-qualified dividends are taxed at your ordinary income rate, which can be up to 37%.