Calculating total return on a stock is key for investors

— -- Q: How do you calculate the total return of a stock? Is there a website that calculates it?

A: When you own stock, you win in two ways: dividends and stock price appreciation.

When a stock rises, the value of your stake rises. Stock price increases are often what investors think most about, especially during raging bull markets. Meanwhile, more than half of the companies in the S&P 500 pay a dividend, or a cash payment, typically every quarter.

When you add the change in value of the stock to the dividend, you calculate the investors' total return. The total return is a tally of the net gain, or loss, an investor received by owning a stock and receiving the dividend.

To calculate a total return, in a quick and dirty way, you just need three things.

• You need to know the price of the stock at the beginning of the period that you're measuring, say at the beginning of the year.

• You need the sum of all the dividends, per share, that were paid.

• You need the price of the stock at the end of the period you are measuring, say the last day of the year.

Start by adding the value of the dividends to the stock price at the end of the period. Subtract from that sum the price of the stock at the start of the period and divide that difference by the price of the stock at the start of the period. Multiply by 100 to get the percentage.

Here's an example. Say a stock started the year at $20 a share, paid $2 a share in dividends and ended the year at $25 a share. The total return would be:

(27 - 20) / 20 or 35% total return

There are more precise and complicated ways to calculating total return. But this method will get you pretty close.

Does all this seem like lots of work? Wouldn't it be nice if there was a website that could do some of the mathematical heavy lifting for you? There is.

Morningstar.com can calculate the total returns for stocks for the year-to-date as well as the previous five years. You can also get trailing total returns for a large range of time periods ranging from the last day to the past 15 years.

To get the data, go to Morningstar.com and enter the symbol of the stock you're interested in the Quote box at the top of the page and click the "Quote" button. Look down the page a bit, under the name of the company, and click the Performance tab. You'll see all sorts of total return information for a variety of time periods.

Matt Krantz is a financial markets reporter at USA TODAY and author of Investing Online for Dummies and Fundamental Analysis for Dummies. He answers a different reader question every weekday in his Ask Matt column at money.usatoday.com. To submit a question, e-mail Matt at mkrantz@usatoday.com. Follow Matt on Twitter at: twitter.com/mattkrantz