Stock Return Calculator

Stock return measures how much money you made (or lost) on a stock investment, including both the change in share price and any dividends received.

Total return formulas:

Total Cost = Buy Price × Shares

Total Gain = (Sell Price - Buy Price) × Shares + Dividends

Total Return (%) = (Total Gain / Total Cost) × 100

What the variables mean:

• Buy Price is the price per share when you purchased the stock
• Sell Price is the price per share when you sold, or the current price if you still hold it
• Shares is the number of shares you own
• Dividends is the total cash received over the holding period
• Holding Period is how many years you held the investment

Annualized return adjusts the total return to a per-year basis, making it easy to compare investments held for different lengths of time:

Annualized Return (%) = ((Ending Value / Beginning Value) ^ (1 / Years) - 1) × 100

Where Ending Value = (Sell Price × Shares) + Dividends and Beginning Value = Buy Price × Shares.

Practical example: You bought 100 shares at $50 ($5,000 total), sold at $75, and received $200 in dividends over 3 years. Total gain = ($75 - $50) × 100 + $200 = $2,700. Total return = 54%. Annualized return = ((7,700 / 5,000) ^ (1/3) - 1) × 100 = 15.48% per year.

Notice that the $200 of dividends is only 7.4% of that $2,700 gain here. On a mature dividend payer held for twenty years it is routinely half. That is the whole reason the “S&P 500 returned 10%” figure and the “S&P 500 chart went up 7%” figure disagree: one counts dividends and the other does not.

One thing this calculation quietly assumes. It treats every dividend as if it arrived on the last day, sitting in cash. If you reinvested them, your real annualized return is higher than the number here, because those reinvested shares were themselves compounding. Getting that exact needs the dividend dates and the reinvestment prices, which is more bookkeeping than most people want. Read this figure as a floor.

Tips: Always include dividends. The S&P 500 has historically returned about 10% a year including them over long periods, and roughly 7% without. Annualized return is the right metric for comparing two investments held for different lengths of time, because it normalizes for the holding period.