Capital Gains Yield Calculator

Q: What is Capital Gains Yield (CGY)?

Capital Gains Yield (CGY) is the price appreciation on an investment expressed as a percentage of the original purchase price. It measures how much the price of a security has increased (or decreased) relative to your initial investment. The formula is CGY = (P₁ - P₀) / P₀ × 100%, where P₁ is the current price and P₀ is the initial purchase price.

Q: What is the difference between Capital Gains Yield and Total Return?

Capital Gains Yield measures only the price appreciation of an investment, while Total Return includes both price appreciation (CGY) and income received (dividends or interest). Total Return = Capital Gains Yield + Dividend Yield. For a complete picture of investment performance, you should consider total return rather than just capital gains.

Q: How do you calculate annualized return from total return?

Annualized return, also known as Compound Annual Growth Rate (CAGR), converts total return over multiple years into an equivalent annual rate. The formula is CAGR = ((1 + Total Return)^(1/n) - 1) × 100%, where n is the number of years. This allows you to compare investments held for different time periods on an equal basis.

Q: Can capital gains yield be negative?

Yes, capital gains yield can be negative when the current price is lower than the purchase price, indicating a capital loss. For example, if you bought a stock at $100 and it is now worth $80, the CGY would be -20%. Negative CGY represents depreciation in the investment value.

Q: Why is dividend yield important in total return calculation?

Dividend yield represents the income component of your investment return. Some stocks may have low price appreciation but provide substantial dividends, while others focus on growth with minimal dividends. Including dividend yield gives a complete picture of your investment's performance. For income-focused investors, dividend yield can be the primary source of returns.

Q: What is a good capital gains yield for stocks?

A 'good' capital gains yield depends on your investment goals, risk tolerance, and market conditions. Historically, the S&P 500 has averaged about 7-10% annual returns including dividends. Growth stocks may target higher CGY (15%+) but with more volatility, while value stocks may have lower CGY but higher dividend yields. Compare your CGY to relevant benchmarks and your personal investment objectives.

Calculate capital gains yield (CGY), dividend yield, total return, and annualized performance with step-by-step formulas, interactive charts, and investment analysis.

Capital Gains Yield Calculator

Calculate CGY, dividend yield, total return, and annualized performance

Try example investments:

Growth Stock Dividend Stock Loss Example Long-term Hold

Required Information

Initial Purchase Price (per share)

Current/Selling Price (per share)

Optional: Enhanced Analysis

Dividends Received (per share)

Number of Shares

Holding Period (for annualized return)

years

Embed Capital Gains Yield Calculator Widget

About Capital Gains Yield Calculator

Welcome to the Capital Gains Yield Calculator, a comprehensive investment analysis tool that calculates CGY, dividend yield, total return, and annualized performance with step-by-step formulas and interactive visualizations. Whether you are analyzing stock investments, evaluating portfolio performance, or comparing investment opportunities, this calculator provides professional-grade analysis for informed decision-making.

What is Capital Gains Yield (CGY)?

Capital Gains Yield (CGY) measures the price appreciation of an investment as a percentage of the original purchase price. It represents the return from the change in the security's market price, excluding any income from dividends or interest payments.

CGY is essential for investors who want to understand how much of their return comes from price appreciation versus income distributions. Growth investors typically focus on capital gains, while income investors prioritize dividend yield.

Capital Gains Yield Formula

Capital Gains Yield

$$\text{CGY} = \frac{P_1 - P_0}{P_0} \times 100\%$$

Where:

P₁ = Current or ending price of the security
P₀ = Original or beginning price of the security

Understanding Total Return

Total Return provides a complete picture of investment performance by combining both capital gains and income received. For stocks, this includes price appreciation plus dividends; for bonds, it includes price changes plus interest payments.

Total Return

$$\text{Total Return} = \text{Capital Gains Yield} + \text{Dividend Yield}$$

Dividend Yield Formula

Dividend Yield

$$\text{Dividend Yield} = \frac{\text{Dividends Received}}{P_0} \times 100\%$$

Annualized Return (CAGR)

When comparing investments held for different time periods, the Compound Annual Growth Rate (CAGR) provides an equivalent annual return rate. This allows fair comparison between a 2-year investment and a 5-year investment.

Compound Annual Growth Rate

$$\text{CAGR} = \left( \left(1 + \frac{\text{Total Return}}{100}\right)^{1/n} - 1 \right) \times 100\%$$

Where n is the number of years the investment was held.

How to Use This Calculator

Enter the initial purchase price: The price per share when you bought the investment.
Enter the current/selling price: The current market price or the price at which you sold.
Add dividends received (optional): Total dividends per share during the holding period.
Enter number of shares (optional): See your absolute dollar gains alongside percentage returns.
Add holding period (optional): Years held to calculate annualized return (CAGR).
Calculate: Get comprehensive results with visualizations and step-by-step calculations.

Investment Performance Benchmarks

Understanding how your investment performs relative to market benchmarks helps contextualize your returns:

Annual Return	Rating	Interpretation
20%+	Exceptional	Outstanding performance exceeding most benchmarks
12-20%	Excellent	Strong returns above historical market average
7-12%	Good	Solid performance in line with long-term equity returns
3-7%	Moderate	Modest returns, may underperform inflation-adjusted benchmarks
0-3%	Low	Below-average, consider alternative investments
<0%	Negative	Investment loss - review strategy

Note: The S&P 500 has historically averaged approximately 10% annual returns including dividends. Individual investment performance should be compared to relevant benchmarks based on asset class and risk profile.

CGY vs Total Return: Which to Use?

Use Capital Gains Yield when:

Analyzing growth stocks that don't pay dividends
Evaluating real estate appreciation
Comparing price performance between investments
Tax planning for capital gains

Use Total Return when:

Evaluating overall investment performance
Comparing income-producing vs growth investments
Planning retirement income strategies
Benchmarking against market indices

Practical Examples

Example 1: Growth Stock

You bought shares of a technology company at $50 per share. After 2 years, the stock is worth $75, and the company paid $0 in dividends.

CGY = ($75 - $50) / $50 × 100% = 50%
Dividend Yield = $0 / $50 × 100% = 0%
Total Return = 50% + 0% = 50%
CAGR = ((1 + 0.50)^(1/2) - 1) × 100% = 22.47% per year

Example 2: Dividend Stock

You bought shares of a utility company at $40 per share. After 3 years, the stock is worth $44, and you received $6 in total dividends per share.

CGY = ($44 - $40) / $40 × 100% = 10%
Dividend Yield = $6 / $40 × 100% = 15%
Total Return = 10% + 15% = 25%
CAGR = ((1 + 0.25)^(1/3) - 1) × 100% = 7.72% per year

Factors Affecting Capital Gains

Market conditions: Bull and bear markets significantly impact price movements
Company performance: Earnings growth, revenue, and profitability drive valuations
Industry trends: Sector rotation and industry dynamics affect stock prices
Economic factors: Interest rates, inflation, and GDP growth influence markets
Investor sentiment: Market psychology and risk appetite affect valuations

Tax Considerations

Capital gains are typically subject to taxation. Understanding the tax implications helps with investment planning:

Short-term capital gains: Investments held less than one year are typically taxed at ordinary income rates
Long-term capital gains: Investments held more than one year often qualify for preferential tax rates
Qualified dividends: May receive favorable tax treatment compared to ordinary income
Tax-loss harvesting: Realized losses can offset gains for tax purposes

Tax Tip: Always consult a qualified tax professional for advice specific to your situation. Tax laws vary by jurisdiction and change over time.

Frequently Asked Questions

What is Capital Gains Yield (CGY)?

Capital Gains Yield (CGY) is the price appreciation on an investment expressed as a percentage of the original purchase price. It measures how much the price of a security has increased (or decreased) relative to your initial investment. The formula is CGY = (P₁ - P₀) / P₀ × 100%, where P₁ is the current price and P₀ is the initial purchase price.

What is the difference between Capital Gains Yield and Total Return?

Capital Gains Yield measures only the price appreciation of an investment, while Total Return includes both price appreciation (CGY) and income received (dividends or interest). Total Return = Capital Gains Yield + Dividend Yield. For a complete picture of investment performance, you should consider total return rather than just capital gains.

How do you calculate annualized return from total return?

Annualized return, also known as Compound Annual Growth Rate (CAGR), converts total return over multiple years into an equivalent annual rate. The formula is CAGR = ((1 + Total Return)^(1/n) - 1) × 100%, where n is the number of years. This allows you to compare investments held for different time periods on an equal basis.

Can capital gains yield be negative?

Yes, capital gains yield can be negative when the current price is lower than the purchase price, indicating a capital loss. For example, if you bought a stock at $100 and it is now worth $80, the CGY would be -20%. Negative CGY represents depreciation in the investment value.

Why is dividend yield important in total return calculation?

Dividend yield represents the income component of your investment return. Some stocks may have low price appreciation but provide substantial dividends, while others focus on growth with minimal dividends. Including dividend yield gives a complete picture of your investment's performance. For income-focused investors, dividend yield can be the primary source of returns.

What is a good capital gains yield for stocks?

A "good" capital gains yield depends on your investment goals, risk tolerance, and market conditions. Historically, the S&P 500 has averaged about 7-10% annual returns including dividends. Growth stocks may target higher CGY (15%+) but with more volatility, while value stocks may have lower CGY but higher dividend yields. Compare your CGY to relevant benchmarks and your personal investment objectives.

Additional Resources

Reference this content, page, or tool as:

"Capital Gains Yield Calculator" at https://MiniWebtool.com/capital-gains-yield-calculator/ from MiniWebtool, https://MiniWebtool.com/

by miniwebtool team. Updated: Feb 01, 2026

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