Capital Gains Yield Calculator
Enter the purchase price and current price of any investment to instantly see your capital gains yield - the percentage return from price appreciation alone. Add dividends received and a holding period to also get dividend yield, total return, and the annualized CAGR across your holding period. Results update as you type.
What is capital gains yield?
Capital gains yield (CGY) measures the percentage change in an investment's price relative to what you originally paid. It captures only the price-appreciation component of your return, leaving aside any dividend income or distributions. For a stock purchased at $50 that later trades at $65, the capital gains yield is ($65 - $50) / $50 = 30%. A negative figure means the price has fallen below your purchase price, producing a capital loss rather than a gain. CGY is widely used by equity investors to isolate how much of their total return came from price movement versus income, which matters for tax planning because the two sources of return are typically taxed differently.
Capital gains yield vs. total return vs. dividend yield
Three related but distinct metrics describe investment performance. Capital gains yield reflects only the change in market price. Dividend yield reflects only the income distributions received, expressed as a percentage of the purchase price. Total return combines both: it equals capital gains yield plus dividend yield, and gives the complete picture of what you earned across the holding period. A high-growth technology stock might generate a 25% CGY with near-zero dividend yield, while a utility company might generate a 3% CGY alongside a 4% dividend yield, resulting in similar total returns. Knowing each component separately helps investors compare growth-oriented holdings to income-oriented ones on equal footing.
How to annualize returns with CAGR
When you hold an investment for multiple years, a single total-return percentage is harder to compare across time horizons. The compound annual growth rate (CAGR) smooths the return to an equivalent yearly rate. The formula is: CAGR = (1 + total return)^(1/n) - 1, where n is the number of years held. A 33% total return over three years gives CAGR = (1.33)^(1/3) - 1, roughly 10% per year, which is directly comparable to an index fund or savings account quoted in annual terms. CAGR assumes the growth compounds smoothly and does not reflect the volatility you experienced along the way.
Short-term vs. long-term capital gains and taxes
In the United States, capital gains are taxed at different rates depending on how long the asset was held before it was sold. Assets held for 12 months or less are taxed as short-term capital gains at ordinary income tax rates, which can be as high as 37% for high earners. Assets held longer than 12 months qualify for long-term capital gains rates, which top out at 20% for most investors and are 0% for those in the lower tax brackets. Dividend income adds a further dimension: qualified dividends are taxed at long-term rates, while non-qualified dividends are taxed as ordinary income. Because of this asymmetry, investors often structure holdings to maximize long-term treatment wherever possible.
Capital gains yield performance benchmarks
| CGY range | Performance rating | Context |
|---|---|---|
| 20% or above | Exceptional | Well above broad market long-run average |
| 10% to 19.9% | Strong | At or above historical S&P 500 average (~10%/yr) |
| 0% to 9.9% | Positive | Positive return but may trail inflation or market |
| -1% to -9.9% | Moderate loss | Below purchase price; monitor fundamentals |
| -10% or below | Significant loss | Reassess position; consider tax-loss strategy |
Common performance benchmarks investors use to evaluate capital gains yield results.
Frequently asked questions
What is the capital gains yield formula?
The formula is: CGY = (current price - purchase price) / purchase price. Multiply by 100 to express the result as a percentage. For example, if you bought a stock at $40 and it is now worth $50, CGY = ($50 - $40) / $40 = 0.25, or 25%. A result below zero means the price has declined and you have a capital loss.
What is a good capital gains yield?
There is no universal "good" threshold because context matters, including how long you held the investment and what alternatives were available. As a rough benchmark, the U.S. stock market has returned approximately 10% per year on average including dividends. A capital gains yield well above that figure suggests the investment outperformed the broad market on price alone, though it carries no implication about future performance.
Does capital gains yield include dividends?
No. Capital gains yield measures only the change in the investment's price and deliberately excludes dividends. To include dividend income you need total return, which adds dividend yield on top of capital gains yield. Separating the two components is useful because price gains and dividend income are often taxed differently and reflect different characteristics of an investment.
What is the difference between capital gains yield and return on investment?
Capital gains yield measures the price-only return as a percentage of the purchase price. Return on investment (ROI) is a broader concept that can include all costs (commissions, taxes, fees) and all income sources (dividends, interest). For a simple stock position with no transaction costs and no dividends, the two are equivalent. In practice, ROI tends to be used for general project or business analysis, while CGY is specific to price appreciation in a tradable security.
Can capital gains yield be negative?
Yes. A negative capital gains yield simply means the current (or selling) price is below the purchase price, so you have experienced a capital loss on the price change. For example, buying at $100 and seeing the price fall to $80 gives CGY = ($80 - $100) / $100 = -20%. If dividends received during that period exceed the price loss, total return can still be positive even when CGY is negative.
How does holding period affect capital gains yield?
Capital gains yield itself does not change with the holding period - it is just the price change from purchase to a given point in time. However, the holding period matters for two reasons: first, for tax purposes, gains on assets held longer than 12 months qualify for lower long-term capital gains tax rates in the United States; second, you can annualize any total return using CAGR so that investments held for different durations can be compared on an equal annual basis.