What is Yield on Cost?
Yield on cost measures the dividend percent of income that the original investment earns today. It is the dividend yield based on the initial investment in a stock. When a company increases its dividend after you purchased shares, you receive a higher rate of income return on your initial investment. Meaning your yield on cost increases.
Dividend investors track the yield on cost of their portfolio holdings to see the power of consistent dividend growth. It is pleasing to see an investment begin to pay for itself with increased dividend income over time.