Capital Gains Yield


DEFINITION of '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:


Capital Gains Yield

P0 = Original price of the security
P1 = Current/Selling price of the security


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BREAKING DOWN 'Capital Gains Yield'

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.

  1. Dividend

    A distribution of a portion of a company's earnings, decided ...
  2. Return On Capital Gains

    The return that one gets from an increase in the value of a capital ...
  3. Capital Loss

    The loss incurred when a capital asset (investment or real estate) ...
  4. Unrealized Gain

    A profit that exists on paper, resulting from any type of investment. ...
  5. Phantom Gain

    A situation that arises when a gain on an investment is offset ...
  6. Capital Gain

    1. An increase in the value of a capital asset (investment or ...
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