How to Calculate the Performance of a Stock That Has Dividends

by Mark Kennan, studioD

If your stock's price per share does not increase, or even decreases, you may still make a profit if the stock pays dividends. When measuring the performance of a stock that pays dividends, if you do not account for the dividends, you do not get a true picture of the return. When measuring the return of a stock that pays dividends, you can measure return as a dollar figure or a percentage of the purchase price.

Subtract the initial price of the stock from the ending price. If your answer is negative, your stock decreased in value. For example, if you bought a stock for $35 and sold it for $32, you lost $3.

Add any dividends paid by the stock while you owned it. In this example, if the stock paid $1.20 in dividends, add $1.20 to $-3 to get $-1.80.

Divide the gain or loss after accounting for dividends by the purchase price to find the rate of return. In this example, divide $-1.80 by $35 to get -0.0514, or a loss of 5.14 percent.

About the Author

Mark Kennan is a writer based in the Kansas City area, specializing in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."

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