Starting price, ending price and payments
For one share with no interim purchases, return before expenses is (ending price − starting price + dividends) / starting price. This is a single-investment teaching formula, not a method for every portfolio. Purchases on different dates require a separate cash-flow model.
If a share is bought for 100 roubles, pays 6 in dividends and ends at 92, dividend yield on purchase price is 6%, but total result is −2%. With another 1 rouble of expenses, result is −3%. Commissions can matter even when small.[6](#source-valuation-fees) Check that they were not already included, and do not calculate applicable taxes here.
Why percentages differ
One source may divide a payment by current market price, another by purchase price, and a third by an expected next-year payment. All can be mathematically correct while answering different questions. Label numerator, denominator and date. Announced, expected and actually received payments are also different. Use events that occurred for a historical result; label future payments as assumptions and verify them through issuer communications and applicable rules.
A dividend is not a gift disconnected from business economics: paid funds are no longer available to the company for other tasks. Expected dividends can be one way to describe owner cash flows.[16](#source-valuation-dcf) This does not mean the quote must mechanically change by exactly the payment.
Reinvestment is a new set of transactions
A spent dividend remains received income but no longer grows the investment balance. Reinvestment creates a purchase date, price, quantity and possible costs; do not assume the old price. Comparisons must be symmetrical: if one strategy reinvests and another consumes payments, ending asset values alone do not describe equal financial results.
Keep a portfolio log of starting holdings, payments, purchases with those payments, new contributions and withdrawals, expenses and ending holdings. New personal contributions are not investment income.
Payment sustainability and owner result
When reading dividend history, ask whether funds come from repeatable cash results, a one-off event or another source. Past payments do not obligate the company to maintain them, and future return cannot be inferred from the most generous year.
Finish with four lines: price change, received payments, expenses and total. Show unknown tax effects and reinvestment assumptions separately. This avoids confusing an attractive payment with a positive total result or promising income not yet received.