Portfolio · Investing Glossary
What Is Price Return?
Investment performance measured only by price change, excluding dividends or interest.
The Full Definition
Price return measures an investment's performance using only its change in price, ignoring any dividends or interest paid along the way. It's a narrower, often misleadingly low, measure compared to total return — especially for dividend-paying stocks and bonds, where a meaningful share of long-term return comes from income, not price appreciation alone. Financial media headlines often quote price return because it's simpler, but it understates how an investment actually performed for someone who reinvested their dividends.
Real-World Example
A stock that goes from $100 to $107 over a year has a 7% price return. If it also paid a $3 dividend during that time, its total return was 10% — the price return alone left out nearly a third of the actual gain.
Related Terms
- Total ReturnInvestment performance including both price appreciation and income (dividends/interest).
- DividendA cash payment a company makes to shareholders, usually quarterly.
- Compound InterestEarning returns on both your original investment and your accumulated gains.
- ReinvestmentUsing investment income — dividends, interest, or capital gains — to buy more shares instead of cashing out.