Dividend Yield Calculator

Calculate dividend yield, annual income, and investment needed for your target monthly income

Stock & Dividend Information
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Current market price per share
£
Total annual dividend paid per share
shares
Payment frequency (info only)
Optional: Dividend Cover Analysis
£
From company financial reports
About Dividend Yield
What is Dividend Yield?

Dividend yield shows the annual income return from dividends as a percentage of the share price. It's calculated as:

Dividend Yield % = (Annual Dividend Per Share ÷ Share Price) × 100

For example, a £100 share paying £4 in annual dividends has a 4% yield.

FTSE 100 Average Yields (2026)
  • FTSE 100: 3.5-4% average yield
  • FTSE 250: 3-3.5% average yield
  • High-yield stocks: 6-8% (utilities, REITs, mature sectors)
  • Growth stocks: 0-2% (reinvest profits instead of paying dividends)
Understanding Dividend Cover

Dividend cover measures sustainability by comparing earnings to dividends paid:

  • Above 2x: Very safe. Company retains earnings for growth and can weather downturns.
  • 1.5-2x: Safe. Adequate coverage with some earnings retained.
  • 1-1.5x: Moderate risk. Little buffer if earnings decline.
  • Below 1x: Unsustainable. Company paying more than it earns (likely to cut dividend).
UK Dividend Aristocrats

These companies have increased dividends for 25+ consecutive years:

  • Diageo (beverages) - 30+ years
  • GlaxoSmithKline (pharmaceuticals) - 25+ years
  • Croda International (chemicals) - 25+ years

Dividend aristocrats offer reliability but may have lower yields than higher-risk stocks.

FTSE 100 Benchmark
Average FTSE 100 Yield
3.75%
January 2026
Yield Categories
Low 0-2%
Below Average 2-3.5%
Average 3.5-4.5%
Good 4.5-6%
High (verify) 6%+

Yields above 7% may indicate dividend cut risk or sector distress. Always research sustainability.

Quick Examples
Tips for Dividend Investors
  • Diversify: Hold 15-25 stocks across sectors to reduce risk
  • Check cover: Dividend cover above 1.5x is safer long-term
  • Reinvest: Use dividend reinvestment plans (DRIPs) to compound growth
  • Tax efficiency: Use ISA allowance (£20,000/year) for tax-free dividends
  • Beware high yields: Yields above 8% often signal problems
  • Track record: Favour companies with 10+ years of consistent dividends
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