Every investor needs to know their true return on investment. This calculator computes your actual profit or loss from stock trades, accounting for purchase price, sale price, dividends, and trading costs.
How This Calculator Works
This calculator provides complete trade analysis:
- Buy Price: Price per share when purchased
- Number of Shares: How many shares you bought
- Sell Price: Price per share when sold (or current price)
- Dividends Received: Total dividends collected while holding
- Commissions/Fees: Trading costs for buying and selling
- Return Metrics: Net profit, percentage return, and annualized return
The Formula Explained
Total Cost = (Buy Price × Shares) + Commissions
Sale Proceeds = (Sell Price × Shares) - Commissions
Net Profit = Sale Proceeds + Dividends - Total Cost
ROI = (Net Profit / Total Cost) × 100
Annualized Return = [(1 + ROI)^(1/years)] - 1
Step-by-Step Example
AAPL Trade Analysis
| Transaction | Details |
| Bought | 50 shares @ $120 |
| Commission | $10 |
| Total Cost | $6,010 |
| Dividends | $48 (over 18 months) |
| Sold | 50 shares @ $178 |
| Commission | $10 |
| Sale Proceeds | $8,890 |
| Net Profit | $2,928 |
| ROI | 48.7% |
| Annualized | 30.5% |
Frequently Asked Questions
What is return on investment (ROI) for stocks?
ROI measures your profit as a percentage of your investment. If you invested $1,000 and made $200 profit, your ROI is 20%. It includes all gains—price appreciation plus dividends—minus all costs like commissions. ROI lets you compare different investments regardless of dollar amounts.
What's the difference between total return and price return?
Price return only measures stock price change (selling vs buying price). Total return includes dividends reinvested or received. For dividend-paying stocks, total return is significantly higher than price return. Always use total return for accurate performance measurement.
How do I calculate annualized return?
Annualized return converts any holding period to a yearly rate for comparison. Formula: [(1 + Total Return)^(1/years)] - 1. A 50% return over 2.5 years = 18.3% annualized. This helps compare a 6-month trade to a 5-year investment fairly.
Should I include dividends in my return calculation?
Absolutely. Dividends are real returns you received. Historically, dividends account for 25-40% of S&P 500 total returns. Ignoring them dramatically understates your actual performance from dividend-paying stocks. Always track and include dividends.
How do commissions affect my returns?
Commissions reduce both sides of a trade. Many brokers now offer $0 commission trades, but some still charge $5-10 per trade. For large trades this is negligible, but on a $500 trade, a $20 round-trip commission (buy + sell) reduces returns by 4% before the stock even moves!
What is a good stock return?
The S&P 500 has returned approximately 10% annually over the long term. Individual stock returns vary wildly. Beating the market consistently is very difficult—most professional fund managers fail to do so. Match the market (buy index funds) is an excellent result for most investors.
How do taxes affect my stock returns?
Stock profits are taxed as capital gains. Short-term (held less than 1 year): taxed as ordinary income (10-37%). Long-term (held over 1 year): preferential rates (0%, 15%, or 20% depending on income). Always calculate after-tax returns for accurate comparison. Tax-loss harvesting can offset gains.
What is cost basis and why does it matter?
Cost basis is your original investment amount plus fees—what you "paid" for tax purposes. If you bought at $100/share plus $10 commission, your cost basis is $101/share. When you sell, profit = sale proceeds - cost basis. Accurate cost basis is essential for tax reporting; brokers usually track it for you.
Key Points to Remember
- Include all costs: Commissions, fees, and dividend reinvestment affect true returns
- Use total return: Price change plus dividends is your real performance
- Annualize for comparison: Convert different holding periods to yearly rates
- Consider taxes: After-tax returns matter most for your actual wealth
- Benchmark yourself: Compare to S&P 500 to know if you're beating the market