Yield on Cost
What Is Yield on Cost (YOC)?
Yield on cost (YOC) is a measure of dividend yield calculated by dividing a stock’s current dividend by the price initially paid for that stock. For example, if an investor purchased a stock five years ago for $20, and its current dividend is $1.50 per share, then the YOC for that stock would be 7.5%.
YOC should not be confused with the term “current dividend yield.” The latter refers to the dividend payment divided by the stock’s current price, rather than the price at which it was initially purchased.
KEY TAKEAWAYS