Dividends
Yield on Cost
Yield on cost measures today's dividend against the price you actually paid, not today's market price.
A stock you bought at $50 that now pays $3 a year yields 6% on your cost even if the current price is $100 and the current yield is 3%. That is the income reward for having bought earlier and held through the raises. It is a personal number. A new buyer does not get your yield on cost. They get today's yield.
Do not use yield on cost to decide whether the stock is still a good hold. That decision depends on the current price, the current payout safety, and what else you could own. Yield on cost explains your income. It does not excuse an expensive or deteriorating business.
Formula
Yield on cost = current annual dividend ÷ the price you originally paid
Live example
Apple Inc. (AAPL) last printed at $345.65 with a market cap of $5.04T. This quote has no dividend yield, which is itself the example: yield is blank when no dividend is being capitalized.
Related
Dividend Yield · Dividend Growth · Payout Ratio
See it on a list: best stocks · screener
Questions
Should I compare yield on cost with a bond?
You can, as a description of your income. You should not use it as a reason to ignore a price that already discounts a cut.
Does reinvestment change it?
Dividend reinvestment changes your share count and your average cost. Recalculate with the cash you actually have in the position.