Yield on Cost (YOC)

The dividend yield calculated on your original purchase price — not the current market price. Shows how much your investment is truly yielding based on what you paid.

Yield on Cost: The Dividend Investor's True Return Metric

If you bought a stock for $20 and it now pays $2 annual dividend, the current yield is based on today's price. But your personal Yield on Cost is based on what you paid — $20 — giving you a YOC of 10%, regardless of whether the stock now trades at $40.

YOC Formula

YOC (%) = Annual Dividend per Share / Original Purchase Price × 100

Example: You bought TORM at $18/share in 2022. Current annual dividend: $3.20/share. YOC = 3.20 / 18 × 100 = 17.8% YOC — even if current yield at market price is only 6%.

Why YOC Matters for Hard Asset Investors

For shipping, mining, and pipeline stocks — which often trade at deep cycles — YOC captures the true power of buying at cyclical lows:

Stock	Buy Price	Current Dividend	YOC	Current Yield
CMB.Tech	$14	~$2.10	~15%	~12%
TORM	$18	$3.20	17.8%	~6%
BW LPG	$14	$0.67 Q1	>8% annl.	~10%

Example figures for illustration. Not investment advice. Always verify current dividends.

    Marco's Rule: YOC ≥8% on original purchase price is the quality threshold — it means the dividend alone is returning 8%+ on what you actually paid. Below 8% is not a reason to sell, but it shows whether you bought at the right point in the cycle.
  

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Marco Bozem

Investor & Analyst | Hard Assets, Dividends, Shipping | MB Capital Strategies

Marco tracks YOC on all positions in his hard asset portfolio. Not financial advice.

Not financial advice. Past yields are not guaranteed future returns. Always conduct your own due diligence.