What's the best way for me to go about calculating my porfolio's yield?
I have various holdings which I've bought over the past couple of years, each (obviously) with their own, individual yields. I'm curious to know what, assuming the current/last dividend, my portfolio yielded the last quarter.
Example:
Stock1, 500 shares, 2.1% last quarter's yield
Stock2, 1000 shares, 3% last quarter's yield
Stock3, 250 shares, 5.1% last quarter's yield
Is there a simple online tool for this?
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Hey aagha –
I can’t point you to any simple online tool, though I am sure they exist. I use an excel spreadsheet to track my portfolio that I’ve come up with myself. It has evolved over the years, and I have spent so much time with it that it is very intuitive and helpful to me. I’m not sure if others would find it useful.
To answer your question though, note that there are various yields you might be interested in. My spreadsheet, for example, tracks for each stock I own:
- the current dividend yield (reflecting the current share price),
- the initial yield I locked in at the time of purchase (reflecting the share price I bought at), and
- the yield on cost (reflecting dividend increases since I bought).
Just for fun I also added a projected yield that incorporates my guess about the stock’s next dividend increase.
Then on top of all that, I calculate my average portfolio yields for all of the above as well.
Looking at all of that together helps me to keep a close eye on my portfolio’s performance.
If you’d find it helpful, maybe I can post some screenshots of my spreadsheet(s), or maybe I could even send you a template to noodle with.
Good luck!
Kerim
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Total annual dividends/the current portfolio value = portfolio current yield. It's basically the as how you would calculate a single stock's yield just cumulative for all stocks.
For yield on cost take the total annual dividends/total cost of the positions, do not include reinvested dividends, only the original cost plus any new buys. And of course update any dividend increases.
Hope that helps.
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Projecting dividend increases is interesting.
I tend to use the last dividend increase as my yardstick.
My reasoning is that the next dividend increase is more likely to be closer to the last, rather than the 3 or 5 year average. That is certainly debatable though, and in the end probably doesn't matter much since it's just for fun anyway. Still it's nice knowing you'll probably have X-amount more income next year.
And you can feel pretty confident about your projections if you stick to the good stuff. Some of the stocks people cram their portfolios with amazes me, all this ultra high yield interest rate sensitive stuff. It's like the opposite of playing high flying tech stocks except it's the same. I would love to have a portfolio that yields 8%-12% but that is way outside of my comfort zone, especially now. And it's just not a reasonable expectation, IMO. I mean it's really not.
Personal circumstances dictate how one invests; it's all good and none of my business anyway. <<sanctimonious @hole routine shutting down...>>
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Horace,
I agree that the most recent dividend increase is a good starting place for guessing about the next, but I also factor heavily how earnings are doing and projected to do, in combination with recent payout ratios. I also round down so that my guess is likely to be conservative. I guess I’d rather be pleasantly surprised than disappointed. Maybe it would be fun to start a thread for predictions about upcoming raises?
I agree that it is an easier exercise with some stocks (the “good stuff” as you say) than others. I also agree that relying heavily on high-yield stuff is a recipe for pain, but I do allocate a small portion of my portfolio to it -- I’ve got some NLY and FTR in my holdings. It is certainly riskier than my PG, JNJ, MO, and the such, and it gives me more headaches, but I like the extra juice they provide and feel like, in moderation, it is risk I can live with. Even if they cut their dividends in half they would be my highest-yielders.
Of course, I don’t attempt (with any seriousness, anyway) to predict the trajectory of future dividends with names like those. I hope they don’t cut and am happy with the income.
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I guess in the end you holding stocks like NLY and other high yielders is no different than me holding HAL or APA. You're looking for a little extra kicker and so am I, and am willing to have a few headaches to get it.
Being retired colors my world a little differently though. When it comes to income I don't want any surprises. I stick with the good stuff and resign myself to accepting a little less but knowing I'll get it.
Of course anything is possible and PG and JNJ could eliminate their dividends, but I doubt much else would be left standing if they did.
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Not everybody is good at math. Some people just do not seem to have an appreciation for numbers. And still, as adults we have to build specific math skills to be able to make good financial decisions. We have to know the difference between simple and compound interest, and how to compute each. Those seeking to invest likewise have to know how to calculate dividends.
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Welcome samuelN! Glad to have you here and thanks for posting!
I hope your link was intended as an example of *bad* financial decision-making!
(07-12-2013, 11:56 AM)Horace Cugle Wrote: Total annual dividends/the current portfolio value = portfolio current yield. It's basically the as how you would calculate a single stock's yield just cumulative for all stocks.
For yield on cost take the total annual dividends/total cost of the positions, do not include reinvested dividends, only the original cost plus any new buys. And of course update any dividend increases.
Hope that helps.
Is Current portfolio value market value? Might be an interesting % but meaningless to me.
For yield on cost I consider re-invested dividends as new buys and therefore include the total as my cost (initial invest, re-invested div and additional buys). Then the current dividend divided by the average cost of my total invest gives me my yield on cost.
(06-17-2013, 06:03 PM)aagha Wrote: What's the best way for me to go about calculating my porfolio's yield?
I have various holdings which I've bought over the past couple of years, each (obviously) with their own, individual yields. I'm curious to know what, assuming the current/last dividend, my portfolio yielded the last quarter.
Each to their own method based on what they consider important. I set up an excel file with different worksheets to track different information. Much of the information is linked to other worksheets. Some of the worksheet are:
1. Monthly Div Paid - a list of the stocks I own which records the quarterly div paid for each stock. I also highlight when the div is increased.
2. Monthly div Rec'd - this list the stocks owned, grouped by category (My RRIF, My TFSA, Wife RRIF, Wife TFSA, Jnt Stocks), where I record the actual div amount received. It is totaled by month then for the year. Previous years are maintained.
3. Qtr Div Sum - Stocks are listed by the Qtr div is paid. List the total investment in each stock, the Qtr Div and the annual div. Shows me how much I can expect each Qtr and year from div. Changes as the value invested increases. (I show current price to get market value)
4. Ind Stock Investment -For each group (me, wife, jnt) I record the individual stock history (Initial buy, additional buys and div re-invest), by date of transaction.
5. Stock summary - this is a summary of all stocks record by each group and totalled. Market value is also shown here.
Was a bit of work getting it set up but maintaining it only takes a few minutes. We own 22 stocks but there are duplicates so the total number of stocks to record is over 50. All reports show my Total Investment, Total Div and Yield on Cost by stock and in Total.
** people invest in bonds for the Income (thinking their capital is protected). actually the capital looses value because of inflation.
I invest in DG stocks for the Income it generates and the growing Income. As the dividend grows so does my capital and usually at the same rate as the div growth.
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I really like Google Docs. Here are two views of my setup for calculating stock and portfolio yields. The second image shows the formulas that need to be typed in. This spreadsheet automatically updates the market price, but the dividend amounts have to be keyed in, as well as the tickers and the share count. All other fields are calculated.
I can't figure a way to post the images so will provide a link to my I.V. site to view the spreadsheet. If the link to I.V. doesn't work, let me know, and I'll figure another way to show the info, perhaps will give a link to the chart at the Google Docs site.
http://premium.investorvillage.com/group...d=13151537
Alex
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(06-17-2013, 06:03 PM)aagha Wrote: What's the best way for me to go about calculating my porfolio's yield?
I have various holdings which I've bought over the past couple of years, each (obviously) with their own, individual yields. I'm curious to know what, assuming the current/last dividend, my portfolio yielded the last quarter.
Example:
Stock1, 500 shares, 2.1% last quarter's yield
Stock2, 1000 shares, 3% last quarter's yield
Stock3, 250 shares, 5.1% last quarter's yield
Is there a simple online tool for this?
I have used Investment Account Manager (IAM) for several years. It has gone by different names over the years but is still basically the same software. It will track all buys, sales, splits, cost basis, etc. and calculate cost yield, current yield, total yield, portfolio yield, and S&P yield. It is produced by QUANT IX Software, Inc.
JDurham
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