---
title: Capital Gains Yield
description: The capital gains yield of a stock represents absolute return — often used to find out the return of a stock from the time of purchase to the time of sale.
---

[Realized 1031 Glossary of Terms ](https://www.realized1031.com/glossary)

# [Capital Gains Yield](https://www.realized1031.com/glossary/capital-gains-yield)

 Written by [The Realized Team](https://www.realized1031.com/glossary/author/the-realized-team) | Jun 22, 2022 12:00:00 PM

The capital gains yield of a stock represents the absolute return from time 1 to time 2. It is calculated using the formula: (p2 - p1) / p1, where p1 is the price at time 1 and p2 is the price at time 2. For example, the price of the stock ABC is $100 on day 1. On day 5, it is $105. Its capital gains yield is (105 - 100) / 100 = 0.0105 or a 1.05% gain.

Capital gains yield is often used to find out the return of a stock from the time of purchase to the time of sale. In the above example, the investor would have purchased the stock at $100 and netted a $5 gain in dollar terms, resulting in a 1.05% gain. Capital gains yield doesn’t include stock dividends, which is considered total return.

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