Stock Return Calculator

Most investors focus solely on the "ticker price" of a stock, but this only tells half the story. To understand your true investment performance, you must calculate Total Shareholder Return (TSR), which includes capital gains (price appreciation), dividends received, and the impact of trading expenses.

As noted by FINRA, understanding the cost basis and the impact of fees is essential for accurate performance tracking and tax reporting.

The Stock ROI Formula

To calculate your total percentage return, use the following logic:

Key Components of Success

• Capital Gains: The profit made when the selling price of the stock is higher than the original purchase price.
• Dividend Yield: The annual dividend payments per share, divided by the stock's price. This is powerful "passive income" that can be reinvested to accelerate growth.
• Cost Basis: The total price paid for a stock plus any commissions or brokerage fees. This is critical for calculating capital gains taxes, as monitored by the IRS.

The Impact of Fees and Commissions

Even "zero-commission" brokers have hidden costs like bid-ask spreads or regulatory fees. High frequency trading or constant churning of your portfolio can lead to "fee drag," where costs significantly erode your long-term returns. Our calculator accounts for these entry and exit costs to give you an honest appraisal of your profit.

Dividend Reinvestment (DRIP)

Reinvesting dividends allows you to purchase more shares of the stock, which in turn generate more dividends. This creates a powerful compounding loop. According to the SEC, reinvesting dividends has historically accounted for a massive portion of the S&P 500's total returns over long time horizons.

Risk and Volatility

While this tool calculates historical or projected returns, it's important to remember that stock prices are volatile. Always diversify your holdings and maintain a long-term perspective to weather the natural cycles of the market.