Capital Gains Yield
The price appreciation component of a security's (such as a common stock) total return. For stock holdings, the capital gains yield will be the change in price divided by the original (purchase) price.
Calculated as:
Where:
P0 = Original price of the security
P1 = Current/Selling price of the security Investopedia Says:
For example, suppose Peter purchased a share of XYZ for $100 and he later sells the share for $110. The capital gains yield for that investment would be 10%.
It is important to analyze both the capital gains yield and the total return yield of an investment holding. Dividends are not to be counted in a capital gains yield assessment, but keep in mind that depending on the stock, dividends could comprise a substantial portion of the total return of the stock compared to capital gains. Related Terms:
Capital Gain
Capital Gains Tax
Capital Loss
Dividend
Phantom Gain
Return On Capital Gains
Unrealized Gain |