Cost Basis vs Market Dividend Yield

uwf24666

My investment approach is based on the income approach.

On the investment tab I have added the metrics that help me gauge how well our portfolio is doing.

The DIVIDEND YIELD column is a nice indicator for buying at today's price.

Maybe I've missed the column but is there an effective dividend yield % (Forward Dividend / Cost Basis)?

An example of one of the disparities:

Market: $7.78

Cost Basis: $3.987228

Forward Dividend: $0.64

Market Yield: 8.82%

Cost Yield: 16.05%

Thoughts?

Jim_Harman

Quicken does not provide that measure.

It is not a measure I would use, because I don't think it is very useful. Cost basis can be reset without affecting the market value or other performance measures, for example by selling a security that has dropped in value and buying it or something similar back.

bmciance

No, cost yield is not a field that is available in Quicken. I have that calculated in Excel for my stocks.

Just to throw my 2 cents in about using cost yield - I don't feel that cost yield is particularly relevant in analyzing your portfolio when looking at income. It is interesting but it doesn't help you make decisions because It is a backward looking statistic. Market yield is more relevant because if you are looking at selling a stock and buying a different stock that is what you want to look at. What you paid for the stock you are looking to sell means nothing. Look at it this way, would you sell your stock where you are making 16.05% to buy one where you could make 9%? The answer is yes because the 9% is higher than the 8.82% market yield of your stock. By selling the 16.05% (which by the way you are only making on your cost amount not the full market amount) yielding stock you can take the unrealized gain that you have (which you are not earning anything on) and put it to work making 9%. When you calculate the total income the 9% yielding stock will pay you more per year.