Stock Return
Total return incl. dividends
About This Calculator
The stock return calculator computes total return including both price appreciation and dividends reinvested. It distinguishes between simple price gain and total return, and annualizes results so you can compare investments of different holding periods on an equal footing.
Formula
Price Return = (End Price − Start Price) / Start Price × 100%
Total Return = (End Price + Dividends Received − Start Price) / Start Price × 100%
Annualized Return = (1 + Total Return/100)^(1/years) − 1
Example Calculation
Buy 100 shares at $40; sell at $55 after 3 years; received $180 in dividends
- Price gain = (55−40)×100 = $1,500
- Total gain = $1,500 + $180 = $1,680
- Total return = $1,680/$4,000 = 42%
- Annualized = (1.42)^(1/3) − 1 = 12.4%/year
Total return: 42%; Annualized: 12.4%/year
Effect of Reinvesting Dividends (20-year period, 3% dividend yield)
| Strategy | Start | End Value (7% price growth) | Annualized Return |
|---|---|---|---|
| Price only | $10,000 | $38,700 | 7.0% |
| Dividends reinvested | $10,000 | $57,300 | 9.2% |
| Difference | — | $18,600 | 2.2% extra/year |
Frequently Asked Questions
Why is total return more important than price return?
Many stocks pay dividends that represent a significant portion of return. Ignoring dividends understates the true performance. Over 20 years, reinvested dividends can account for 40-50% of total stock market returns.
What is dividend reinvestment?
DRIP (Dividend Reinvestment Plan) automatically uses dividend payments to buy more shares instead of paying cash. This compounds returns — you earn dividends on a growing number of shares — and eliminates the temptation to spend payouts.
What is the difference between realized and unrealized return?
Unrealized return is a paper gain/loss while you still hold the shares. Realized return is what you actually received when you sold. Only realized gains are taxable in most jurisdictions (though there are exceptions for certain account types).
How do stock splits affect return calculations?
Stock splits don't change the actual value of your holding — they increase share count proportionally while reducing price. For example, a 2:1 split doubles your shares at half the price. Historical prices are adjusted to account for splits in return calculations.