The formula
How to calculate dividend yield
Dividend yield is the cash a share pays out over a year expressed as a percentage of its price. It is the income half of a total return, and it is the number income investors screen on.
There are two versions in circulation. Trailing yield uses the dividends actually paid over the past year; forward yield uses what the company has announced it intends to pay. Screeners usually show trailing, which lags a cut by up to a year.
The calculator asks for:
- Annual dividend per share — add up the payments made over the last twelve months
- Share price
- Shares held
No submit button: type and the answer moves. Your inputs end up in the link, so the page can be shared already filled in.
Worked example
Here is the calculation with the starting values:
- Annual dividend per share: 1.8
- Share price: 42
- Shares held: 500
That gives:
- Dividend yield: 4.29 %
- Annual income: 900
- Average per month: 75
Reading the result
A yield is a ratio, so it moves when either half moves. A jump from 4% to 9% almost never means the dividend doubled — it usually means the price halved, and the market is pricing in a cut that has not been announced yet.
Where this goes wrong. Buying on yield alone. Check that the payout is covered by earnings and by free cash flow; a dividend funded from borrowing survives until the lender says otherwise.
For a large, established company, 2–5% is a normal range. Consistently above 7% is a signal to investigate rather than celebrate — it usually reflects a share price the market has marked down for a reason.
The answer it gives you is dividend yield. With 1.8 annual dividend per share, 42 share price and 500 shares held, that comes to 4.29 %. Change any field and the figure moves with it.