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Discover Financial Services's yield on cost for the quarter that ended in Mar. 2016 was 28.75.
During the past 13 years, Discover Financial Services's highest Yield on Cost was 63.38. The lowest was 4.18. And the median was 12.94.
Dividend Yield and dividend growth of a stock is an important factor for income investors. But if company A raises its dividend constantly faster than company B, company A's future dividend yield might be much higher than Company B's even if their yields are the same now and their stock prices do not change.
Yield on Cost assumes that you buy and the stock today, and hold it for 5 years. If the company raises it dividends at the same rate as it did over the past 5 years, the dividends investors receive annually in 5 years relative to the stock price today.
Therefore, Yield-on-Cost of Discover Financial Services is calculated as
|Yield-on-Cost||=||Dividend Yield||*||(1||+||Dividend Growth Rate)^5|
Of course the risk here is that the company may not raise its dividends as it did before. The key is to select the companies that can consistently raise its dividends. Usually companies with long history of raising dividends tend to do so.