Dividend Calculator
Estimate the income from a dividend stock or fund. Enter the shares, price and yield, set dividend and price growth, choose the payout frequency and see how reinvesting dividends (DRIP) grows your income over time.
With DRIP on, each payout buys more shares at that date's projected price. Extra investment is added at the end of each year.
Dividend income projection
| Year | Dividend / share | Dividends received | Shares (end) | Share price (end) | Portfolio value | Yield on cost |
|---|
Estimates only, not financial advice. Dividends are not guaranteed and can be cut, and share prices move up and down.
How to use the Dividend Calculator
- Enter how many shares you own or plan to buy, the share price and the dividend yield.
- Choose the payout frequency and how many years to project.
- Set growth rates for the dividend and the share price. Use 0% for a flat projection.
- Turn DRIP on or off, and optionally add a yearly investment and a dividend tax rate.
- Press Calculate and compare the income bars with the dashed line, which shows the other DRIP choice.
Dividend formulas
- Dividend per share (DPS) = share price × dividend yield
- Annual income = shares × DPS × (1 − tax rate)
- Per payout = annual income ÷ payouts per year
- DPS in year n = DPS × (1 + dividend growth)n − 1
- DRIP shares bought = payout ÷ share price on the payout date
- Yield on cost = yearly dividends ÷ total amount invested
DRIP vs cash: example
100 shares at $50, 3.5% yield, 5% dividend growth, 4% share price growth, quarterly payouts, no tax.
| After 10 years | Dividends as cash | DRIP |
|---|---|---|
| Shares owned | 100 | 142.64 |
| Income in year 10 | $271.48 | $378.43 |
| Total dividends received | $2,201.13 | $2,661.28 |
| Shares + cash value | $9,602.35 | $10,556.82 |
Over 20 years with 100 shares at $100, a 4% yield, 6% dividend growth and 5% price growth, DRIP lifts year-20 income from about $1,210 to about $2,741.
Things to check before relying on a dividend
- Payout ratio: the share of earnings paid as dividends. Very high ratios can be hard to sustain.
- Dividend history: how long the company has paid and raised its dividend, and whether it cut during recessions.
- Yield traps: an unusually high yield often means the price has fallen because investors expect a cut.
- Taxes and account type: dividends in tax-advantaged accounts may be taxed differently or not at all.
Frequently asked questions
How do I calculate dividend income?
Annual dividend income = number of shares × dividend per share, and dividend per share = share price × dividend yield. 100 shares at $50 with a 3.5% yield pay $1.75 per share, or $175 a year, which is $43.75 per quarterly payout.
What is a DRIP?
A dividend reinvestment plan uses each dividend to buy more shares, often fractional ones, instead of paying cash. The new shares earn dividends too, so income compounds. In the default example DRIP turns $271 of year-10 income into about $378.
What is yield on cost?
Yield on cost is the yearly dividend divided by the money you invested, not the current price. As a company raises its dividend, your yield on cost rises even if the market yield stays the same.
What dividend growth rate should I use?
Many established dividend payers have raised dividends by roughly 3% to 7% a year over long periods, but there is no guarantee and dividends can be cut. Use a conservative rate and try a few cases.
Does payout frequency change total income?
Not without DRIP: the yearly dividend is the same, just split into more payments. With DRIP, more frequent payouts reinvest sooner and give slightly more growth.
Are taxes included?
Only if you enter a dividend tax rate. Tax is taken off each payout before reinvesting. This is an estimate only, not financial or tax advice.