Figuring total return for a stock is easy if you have the data

ByABC News
January 26, 2009, 1:09 PM

— -- A: Measuring total return on a stock can be as simple or complicated as you'd like. Total return measures how much you've gained from owning an investment, including its dividends.

Measuring a stock's total return is much like measuring the performance of your portfolio. There are easy ways to do it, as explained here, or it can be more involved.

When you're measuring the total return on a stock, it's nearly the same exercise as measuring a portfolio's return, with some important differences, which I'll explain.

But first, this is a good opportunity to tell you about a new feature at USATODAY.com that may serve many investors looking for a quick look at a stock's total return for one year. When you enter the symbol of any stock into a Get a Quote box at USATODAY.com, you'll find something few financial websites offer: year-to-date price change. At the top of each stock quote page, you'll find YTD% Chg., which is the year-to-date percent change in the price of the stock. If you add the stock's dividend yield, found in the first set of stats under the charts on the stock quote page, you'll get a ballpark idea of what the stock's total return would be during the year if the stock were to close exactly where it is now.

That's a quick and dirty stab at total return. What you're asking takes more effort. In this example, I'll stress a method that's not precise, but also not that difficult. Your example is a bit more complicated since you want to go back to the 1980s.

We need three pieces of data to get your total return estimate. Youl need: 1)The price you paid for the stock 2) The current price of the stock and 3) The sum of all the dividends you've received during the period.

Let's go one by one. In most cases, you should have the price you paid either from brokerage statements or by checking the brokerage firm's website. If not, you can get a decent estimate by looking up the stock's closing price on the day you bought the stock.