Dividend Calculator
Work out a dividend stock from day one to decades out. See your starting income and yield, then project the portfolio forward with dividend reinvestment (DRIP), annual dividend growth, share price appreciation, contributions, and tax. The year by year table shows income, shares, balance, and yield on cost.
Formula
Worked example
200 shares at $50 paying $1.50 per share: income = 200 × 1.50 = $300 in year one, a 1.50 ÷ 50 = 3.0% yield. Reinvesting for 20 years with 5% dividend growth and 6% price growth grows both the share count and the payout, so the final-year income and the yield on your original $10,000 cost both rise well above the starting figures.
How dividend income and yield are calculated
Your annual dividend income is the number of shares you hold multiplied by the dividend paid per share over a year. If a company pays $1.50 per share and you own 200 shares, you receive $300 a year. The dividend yield expresses that payout relative to the price you pay: divide the annual dividend per share by the current share price and multiply by 100. Yield lets you compare income across stocks of very different prices, because it is a percentage rather than a dollar figure. Those two numbers, income and yield, are shown the moment you enter your shares, price, and dividend.
Reinvesting dividends (DRIP) and compounding over time
The real power of dividends shows up over years. With reinvestment turned on, every payout buys more shares, those new shares earn their own dividends, and the income compounds. The calculator steps through each payout period (quarterly by default) so reinvestment compounds at the right frequency, then projects the balance, share count, and income forward for as many years as you choose. You can layer on an annual dividend growth rate, since many established payers raise their dividend a few percent each year, and a share price growth rate so the holding value tracks a realistic market path. Add an annual contribution to model topping up the position with fresh cash.
Yield on cost, total return, and tax
Yield on cost answers a question the headline yield cannot: what is the current dividend worth against the price you originally paid? Because the dividend per share grows while your cost basis stays fixed, yield on cost climbs over time and can end up far above the market yield. Total return combines the ending balance with any cash dividends taken (when reinvestment is off) against everything you put in. Turn on the tax option to apply a dividend tax rate each year, which lowers the cash available to reinvest and the after-tax income shown in the schedule. Qualified US dividends are often taxed at 0%, 15%, or 20% depending on income, while ordinary dividends are taxed as regular income.
Why yield alone does not tell the whole story
A high yield looks attractive, but it is a ratio with price in the denominator, so it rises automatically when a share price falls. A yield that jumps to 8% or 10% often reflects a market that expects the dividend to be cut rather than a bargain. To judge whether a payout is sustainable, look at the payout ratio, the share of earnings paid as dividends, and the company history of maintaining or raising the dividend. The projections here assume fixed growth rates that hold every year; real dividends and prices move around, so treat the ending figures as a planning scenario, not a promise.
Dividend yield bands
| Yield | Band | What it often signals |
|---|---|---|
| Under 2% | Low | Growth-focused company reinvesting profits |
| 2% to 4% | Moderate | Established, steady dividend payer |
| 4% to 6% | High | Income-oriented or mature sector |
| Over 6% | Very high | Check sustainability, may signal a falling price |
Rough guide only, typical equity yields vary by sector and market conditions.
Frequently asked questions
How do I calculate my annual dividend income?
Multiply the number of shares you own by the annual dividend per share. For example, 200 shares paying $1.50 each gives 200 × 1.50 = $300 per year before tax. If the company pays quarterly, add the four quarterly payments to get the annual dividend per share.
What does the DRIP (reinvest dividends) option do?
With reinvestment on, every dividend payout is used to buy more shares at the current price, so your share count and income grow over time and compound. The year by year table shows the rising share count and balance. Turn it off to take dividends as cash instead, in which case the calculator counts that cash toward your total return.
What is yield on cost?
Yield on cost is the current annual dividend per share divided by the price you originally paid, rather than today price. Because companies often raise their dividend over time while your cost basis stays fixed, yield on cost rises year after year and can end up well above the market yield on the stock today.
What is a good dividend yield?
There is no single right answer, but many established dividend stocks yield roughly 2% to 4%. Higher yields can mean more income, but a yield above about 6% may signal that the market expects a dividend cut, so check the payout ratio and the company track record before relying on it.
Are dividends taxed?
Usually yes. Dividends are generally taxable in the year you receive them, even if you reinvest them. Turn on the tax option and enter a rate to see the after-tax figures. Qualified US dividends are often taxed at 0%, 15%, or 20%, while ordinary dividends are taxed as regular income; rates vary by account type and jurisdiction.