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Calculate capital gains, total return, and annualized return on a stock investment including dividends.
Stock Return Formulas:
Capital Gain = (Sale Price − Purchase Price) × Shares
Total Return = (Capital Gain + Dividends) / Total Cost × 100
Annualized Return = (1 + Total Return)1/years − 1
Total return measures the complete gain or loss from a stock investment, including price appreciation (capital gains) and income from dividends. It is expressed as a percentage of the original investment amount.
Annualized return converts your total return into a yearly rate, allowing fair comparison between investments held for different periods. A 50% total return over 5 years is very different from 50% over 1 year — annualization makes these comparable.
Yes, in a total return calculation, dividends received are added to the capital gain. This calculator uses the total dividends received over the entire holding period, not dividend yield. Reinvested dividends would require a more complex calculation.
Capital gain only measures price appreciation (sale price minus purchase price times shares). Total return also includes dividends, making it a more complete picture of investment performance.
They are mathematically the same formula. CAGR (Compound Annual Growth Rate) and annualized return both use the geometric mean to convert a total return over multiple years into an equivalent annual rate.
No. This is a pre-tax, pre-commission calculation. In practice, you should subtract brokerage commissions from your proceeds and apply applicable capital gains tax rates to get your after-tax return.