If you already have or are considering investing in multiple stocks, compare their annual performances. If they have different prices, simply comparing the increase in the stock price does not tell the whole story. Find the realized annual return, which measures the change as a percentage of the original price. Knowing the realized annual return helps you to make wiser investment decisions.
Subtract the stock’s price of one year ago from the current price to find the change in the stock price. For example, if the stock price was $12.50 a year ago and has increased to $15.60, subtract $12.50 from $15.60 to find that the price increased by $3.10.
Divide the change in the stock price by the original price to find the annual rate of increase. In the example, divide $3.10 by $12.50 to find that the stock’s realized annual return rate equals 0.248.
Multiply the annual realized return rate by 100 to find the stock’s realized annual return expressed as a percentage. In the example, multiply 0.248 by 100 to find that the stock’s realized annual return equals 24.8 percent.
Based in the Kansas City area, Mike specializes in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."