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Stock Returns Calculator

Calculate your stock investment returns, including capital gains, dividends, and annualized performance. This calculator helps you evaluate the profitability of your stock investments over time.

The amount of money you initially invested in the stock.
The price you paid per share when you purchased the stock.
The current price per share of the stock.
Total dividends received during the holding period.
How long you've held the stock (in years).
Total additional investments made during the holding period.

How to Use This Calculator

  1. Enter your initial investment amount in the stock
  2. Input the purchase price per share when you bought the stock
  3. Enter the current price per share of the stock
  4. Add any dividends you've received during the holding period
  5. Specify how long you've held the stock (in years)
  6. Include any additional contributions made during the holding period
  7. Click Calculate to see your returns and performance metrics

Formula Used

ROI = (Current Value - Initial Investment + Dividends) / Initial Investment × 100%
CAGR = (Current Value / Initial Investment)^(1/Years) - 1

Where:

  • ROI = Return on Investment
  • CAGR = Compound Annual Growth Rate
  • Current Value = (Current Price per Share × Number of Shares) + Dividends
  • Initial Investment = Initial amount invested
  • Years = Holding period in years

Example Calculation

Real-World Scenario:

Sarah invested $5,000 in a tech stock at $100 per share. After 3 years, the stock price increased to $150 per share, and she received $300 in dividends. She also made an additional investment of $1,000 during this period.

Given:

  • Initial Investment = $5,000
  • Purchase Price per Share = $100
  • Current Price per Share = $150
  • Dividends Received = $300
  • Holding Period = 3 years
  • Additional Contributions = $1,000

Calculation:

Number of Shares = $5,000 / $100 = 50 shares

Current Value = (50 shares × $150) + $300 = $7,800

Total Investment = $5,000 + $1,000 = $6,000

ROI = ($7,800 - $6,000) / $6,000 × 100% = 30%

CAGR = ($7,800 / $6,000)^(1/3) - 1 = 9.14%

Result: Sarah's investment grew by 30% overall, with a compound annual growth rate of 9.14%.

Why This Calculation Matters

Practical Applications

  • Evaluating the performance of individual stocks in your portfolio
  • Comparing different investment opportunities
  • Making informed decisions about buying or selling stocks
  • Assessing the effectiveness of your investment strategy

Key Benefits

  • Provides a clear picture of investment performance
  • Helps identify profitable vs. unprofitable investments
  • Enables comparison with market benchmarks
  • Supports tax planning by quantifying capital gains

Common Mistakes & Tips

Many investors forget to account for brokerage fees, commissions, and capital gains taxes when calculating returns. These costs can significantly impact your actual returns. Always factor in these expenses to get a more accurate picture of your investment performance.

If you reinvested dividends to purchase more shares, your calculation should reflect this. Simply adding dividends as cash doesn't accurately represent the compound growth effect of dividend reinvestment. Track the number of shares acquired through dividend reinvestment for a more precise calculation.

High returns often come with higher risk. When evaluating investment performance, consider the volatility and risk associated with the stock. A lower return with less risk might be preferable to a higher return with significant volatility, depending on your investment goals and risk tolerance.

Frequently Asked Questions

ROI (Return on Investment) measures the total return as a percentage of the initial investment, without considering the time period. CAGR (Compound Annual Growth Rate) measures the annual growth rate of an investment over time, accounting for the effect of compounding. CAGR provides a better way to compare investments held for different time periods.

For multiple purchases at different prices, calculate the weighted average purchase price by multiplying each purchase price by the number of shares bought, adding these values together, and dividing by the total number of shares. Then use this average purchase price in your return calculation.

A "good" stock return depends on market conditions, the specific stock, and your investment goals. Historically, the average annual return of the S&P 500 (a broad market index) has been around 10% over long periods. However, individual stocks can vary widely, with some delivering much higher returns and others losing value. It's important to compare your returns to appropriate benchmarks and consider your investment timeline.

References & Disclaimer

Financial Disclaimer

This calculator provides estimates for educational purposes only and should not be considered financial advice. Past performance does not guarantee future results. Stock investments involve risk, including the possible loss of principal. Please consult with a qualified financial advisor before making investment decisions.

References

Accuracy Notice

This calculator does not account for taxes, transaction costs, or inflation, which can significantly impact actual returns. The calculations assume all dividends are received in cash and not reinvested. Results should be used as estimates rather than exact predictions of investment performance.

About the Author

Kumaravel Madhavan

Web developer and data researcher creating accurate, easy-to-use calculators across health, finance, education, and construction and more. Works with subject-matter experts to ensure formulas meet trusted standards like WHO, NIH, and ISO.

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finance investment-savings stock returns money investment tax