See your dividend income grow, year after year.
Enter your shares, dividend, and growth rate to see your annual income, yield on cost, and how reinvesting dividends compounds your portfolio over time.
Your position
DRIP means every dividend automatically buys more shares, which pay their own dividends the next year.
What your dividends do over time
Reinvesting vs taking cash
Portfolio value with DRIP vs without
Yearly dividend income
Dividend scorecard
Year-by-year projection
Dividends grow each year, and reinvested dividends buy more shares at the projected price.
| Year | Shares | Div / share | Dividend income | Portfolio value |
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Dividend investing, explained
Understanding Dividend Yield
Dividend yield is calculated by dividing the annual dividend per share by the stock price. For example, a $2.00 annual dividend on a $50 stock gives a 4% yield. Yield is a key metric for income-focused investors. Higher yields can indicate attractive income but may also signal market concerns about the company.
The Power of Dividend Growth
Companies that consistently increase their dividends create a compounding effect for long-term investors. A stock paying $2.00 today growing at 5% annually will pay $3.26 in 10 years. Over a decade, total dividends received can far exceed the initial yield, especially when dividends are reinvested. Dividend aristocrats have increased payments for 25+ consecutive years.
Dividend Income Projections
This calculator projects your future dividend income based on the current annual dividend and an expected growth rate. Actual results will vary based on company performance, economic conditions, and whether dividends are reinvested. Use conservative growth estimates (3-7%) for more realistic projections.
Yield on cost: your true income return
Current yield measures dividends against today's share price. Yield on cost measures those same dividends against what you originally paid. As a company raises its dividend year after year, your yield on cost climbs even though the market yield stays flat. A stock bought at a 4% yield that grows its dividend 7% a year can be paying you 8% or more on your original cost within a decade. This is why patient dividend growth investors care less about the starting yield and more about the growth rate.
How reinvesting compounds returns
When you reinvest dividends through a DRIP, each payout buys additional shares that then pay their own dividends the following year. That extra income buys still more shares, and the cycle repeats. Over long horizons this snowball can account for a large share of total return. The effect is strongest when the dividend grows and the share price rises together, because you are compounding both the payout and the price.
Common questions
What is a good dividend yield?
A "good" yield depends on the sector and market conditions. S&P 500 average yield is about 1.5-2%. Utility and REIT stocks often yield 3-5%. Yields above 6-7% may be unsustainable. Focus on the combination of yield and growth rather than yield alone.
How are dividends taxed?
Qualified dividends (from most U.S. stocks held over 60 days) are taxed at long-term capital gains rates: 0%, 15%, or 20% depending on your income. Non-qualified dividends are taxed as ordinary income. Dividends in retirement accounts like IRAs are tax-deferred.
Should I reinvest my dividends?
Reinvesting dividends (DRIP) can significantly boost long-term returns through compounding. If you do not need the income now, reinvesting allows you to buy more shares that generate even more dividends. However, if you rely on dividend income for expenses, taking cash payouts is appropriate.
What is dividend growth rate?
The dividend growth rate is the annualized percentage increase in a company's dividend payments. It measures how quickly the company is raising its dividend. Consistent growth of 5-10% annually is considered strong. Look at 5- and 10-year growth averages for reliability.
Estimates for planning only. Real dividend income depends on company performance, dividend cuts or freezes, share price moves, taxes, and reinvestment timing. Dividends are never guaranteed. Verify every figure before you invest.