Capital Gains Yield Calculator
Print| Total Gain per Share | $0.00 |
When evaluating the total financial performance of an investment in stocks or real estate, your profits come from two distinct sources: ongoing income payments (like cash dividends or rental income) and price appreciation. The percentage increase in an asset’s market price—excluding any dividend payments—is known as the Capital Gains Yield (CGY).
Our free Capital Gains Yield Calculator helps investors isolate price growth from income yields. By entering an asset’s initial purchase price and current (or selling) market price, you can measure pure asset appreciation and combine it with dividend yield to find your true Total Return.
How to Calculate Capital Gains Yield
Capital Gains Yield measures the percentage change in an asset’s price over a specific holding period.
The Capital Gains Yield (CGY) Formula:
Capital Gains Yield (%) = [(P₁ - P₀) / P₀] × 100
- P₀ (Initial Price): The original purchase price of the stock or asset.
- P₁ (Ending Price): The current market price or final selling price of the stock or asset.
The Total Return Formula:
Total Return (%) = Capital Gains Yield (%) + Dividend Yield (%)
Comparing Return Components
Understanding how CGY fits into overall investment performance:
| Return Component | Formula | Primary Source of Profit |
|---|---|---|
| Capital Gains Yield (CGY) | (Ending Price - Initial Price) / Initial Price |
Stock price growth / Market appreciation. |
| Dividend Yield (DY) | Annual Dividends Paid / Initial Price |
Cash payouts distributed by the corporation. |
| Total Stock Return | Capital Gains Yield + Dividend Yield |
Complete investment performance. |
Step-by-Step Example Calculation
Imagine buying 100 shares of a dividend-paying stock for $50.00 per share (P₀). One year later, the stock price rises to $62.00 per share (P₁), and you also received $2.00 per share in annual dividends.
Let’s calculate each component:
Step 1: Calculate Capital Gains Yield
CGY = [($62.00 - $50.00) / $50.00] × 100
CGY = ($12.00 / $50.00) × 100 = 24.0%
Step 2: Calculate Dividend Yield
Dividend Yield = ($2.00 / $50.00) × 100 = 4.0%
Step 3: Calculate Total Return
Total Return = 24.0% (CGY) + 4.0% (Dividend Yield) = 28.0%
Your investment generated a 24.0% Capital Gains Yield and a total investment return of 28.0%.
Frequently Asked Questions (FAQ)
Can Capital Gains Yield be negative?
Yes. If the current market price (P₁) drops below your original purchase price (P₀), your Capital Gains Yield will be negative, representing a capital loss on the asset.
What is the difference between Realized and Unrealized Capital Gains?
Unrealized Capital Gains (“paper gains”) occur when your stock price increases while you still hold the shares. Realized Capital Gains occur when you physically sell the asset and lock in the cash profit, which triggers a taxable event for capital gains taxes.
How are capital gains taxed in the US?
If you hold the asset for less than 1 year before selling, it is taxed as a Short-Term Capital Gain at your ordinary income tax rate. If you hold the asset for more than 1 year, it qualifies for preferential Long-Term Capital Gains tax rates (0%, 15%, or 20% depending on income).