How to Calculate a Stock Portfolio Yield

A higher-yielding portfolio distributes a bigger chunk of its value as dividends.

A higher-yielding portfolio distributes a bigger chunk of its value as dividends.

While it’s good to monitor the yield of each individual stock you own, it’s also important to know the yield of your entire portfolio. A stock’s yield, or dividend yield, measures its annual dividends as a percentage of its price. Your portfolio yield represents your total annual dividend income as a percentage of the value of all your stocks – even those that don’t pay dividends. This percentage tells you how well your individual stocks mesh together to generate dividend income.

Visit any financial website that provides stock quotes. Type the ticker symbol of one of your stocks into the stock quote text box and click “Get Quote.” A ticker symbol is one or more letters that are typically related to a company’s business or name.

Identify the stock’s current price and annual dividends per share on its main quote page. The annual dividend might be labeled “dividend rate” or simply “dividend.” Find this information for each stock you own using each one’s ticker symbol. If a stock doesn’t pay a dividend, look up its price only. For example, assume you own 100 shares of a $20 stock that pays 50 cents in annual dividends, 300 shares of a $5 stock that pays no dividends, and 400 shares of a $35 stock that pays $1.25 in annual dividends.

Multiply the number of shares you own of each stock by its dividends per share only if it pays a dividend. In this example, multiply 100 by $0.50 to get $50. Multiply 400 by $1.25 to get $500.

Multiply the number of shares you own of each stock by its price regardless of whether or not it pays a dividend. In this example, multiply 100 by $20 to get $2,000. Multiply 300 by $5 to get $1,500. Multiply 400 by $35 to get $14,000.

Add each Step 3 result to determine your portfolio’s total annual dividend income. In this example, add $50 and $500 to get $550 in annual dividend income.

Add each Step 4 result to determine your portfolio’s total value. In this example, add $2,000, $1,500 and $14,000 to get $17,500.

Divide your portfolio’s total annual dividend income by its total value and multiply your result by 100 to figure its yield. Concluding the example, divide $550 by $17,500 to get 0.031. Multiply 0.031 by 100 to get a portfolio yield of 3.1 percent. This means that, together, your stocks currently pay out 3.1 percent of their value in annual dividends. You get 3.1 cents in annual dividends for every dollar of stock you own.

Tip

  • Your portfolio’s yield measures only the return you currently receive from dividends and excludes any potential price changes.

Photo Credits

  • Thinkstock/Comstock/Getty Images