Yield on Cost: What It Is and Examples

By Matthew DiLallo – Updated Apr 2, 2025 at 9:57 PM

Key Points

Yield on cost calculates the current dividend income against the original investment cost.
The metric helps track how dividend growth affects the income earned on the initial investment.
It can be helpful for comparing the current income to the initial dividend yield.

Yield on cost is a handy metric for income-seeking investors to learn. It measures the income yield an investor is earning on the initial cost basis of their investment. This metric helps show investors how much income they’re earning on an investment following changes to its dividend payment.

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A person measuring a yield sign. — Image source: Getty Images.

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About the Author

Matt DiLallo has been a contributing Motley Fool stock market analyst specializing in covering dividend-paying companies, particularly in the energy and REIT sectors, since 2012. He also covers pre-IPO companies, ETFs, and other investing topics. He holds an MBA from Liberty University.

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Matt DiLallo has positions in Realty Income. The Motley Fool has positions in and recommends Realty Income. The Motley Fool has a disclosure policy.