The 22 Dividends app computes the Yield On Cost (YOC) values for you.
It is important that you understand how the computation is done in order to interpret the numbers correctly:
Companies pay dividends with a certain frequency: e.g. monthly, quarterly, or yearly.
Hint: Some companies pay asymmetric dividends. Meaning, not each dividend payment of a business year has the same dollar value.
The YOC of an upcoming dividend event is computed for that single event only.
For example, let’s assume company XY pays four dividends per year.
Let the buy price per share be $100.0 USD.
If the upcoming dividend per share is $1.0 USD, the YOC of that single dividend is 1.0%.
In this example, the 1.0% is only for one quarter of the business year.
The annualized YOC is computed for your stock positions in the portfolio view.
Publicly listed companies announce dividend increases/decreases in advance: e.g. “Company XY increases their dividends by 5.5%“.
The 22 Dividends app computes the YOC of your stock position from the actually paid dividends during the past 12 months.
Thus, the computed YOC value you see in the app is a trailing value and might overlap two business years.
The dividend increase/decrease of an upcoming dividend event (pay day view) is calculated based on the previous yearly dividend per share value and the upcoming one.
This is the reason why the numbers announced by the finance media might appear to be different from the 22 Dividend app’s computed values.
The media announces the dividend values for the future (which might change due to unexpected events). The app in contrast computes it from past events.
The shopping list visualizes the start yield of a stock. The start yield is the YOC you get if you bought share right now.
The start yield is computed in the same way as for the stock position. It is based on historic payments.