Dividend calculator with DRIP

A dividend calculator estimates how much income your investments will generate from dividends over time, and how that income grows if you reinvest it. You enter your investment amount (or share count), the dividend yield, an optional dividend growth rate, and a time horizon, and it projects your annual dividend income, total dividends earned, and ending portfolio value. These projections are hypothetical and not guarantees of future results.

Annual dividend income is your amount invested multiplied by the dividend yield: dividend income = amount invested × dividend yield. For example, $10,000 at a 3% yield generates about $300 in the first year. If you reinvest and the dividend grows, that income rises in later years — but actual dividends are set by each company and are not guaranteed.

Dividend yield is the annual dividend divided by the share price: dividend yield = annual dividend per share ÷ share price. A stock paying $2 per share a year at a $50 price has a 4% yield. Yield rises when the price falls, so an unusually high yield can signal a declining share price rather than a stronger payout.

A DRIP, or dividend reinvestment plan, automatically uses your dividends to buy more shares instead of paying them out as cash. Because each reinvested dividend grows your position, your next dividend is paid on a larger holding — compounding over time. This calculator models a DRIP when "Reinvest dividends" is on. Reinvestment does not guarantee gains and does not protect against loss in a declining market.

Reinvesting dividends can grow a portfolio's long-term value compared with taking dividends as cash, because reinvested dividends buy more shares that themselves pay dividends. The exact difference depends on yield, dividend growth, share-price performance, and time. This calculator shows the side-by-side difference for your inputs — all figures hypothetical and not guarantees of future results.

Dividend growth is the annual rate at which a company raises its dividend. A growing dividend lifts your income over time even without new investment, and it accelerates compounding when dividends are reinvested. You can set an assumed growth rate here — but dividend growth is not guaranteed, and companies can cut or suspend dividends at any time.

There is no single "good" yield — it depends on your goals and the market. Broad US index yields have historically run around 1.5–2%, while dividend-focused stocks and funds often yield 3–5%. A higher yield can mean more income, but an unusually high one may reflect a falling share price or added risk. This is educational information, not investment advice.

The ex-dividend date (or "ex-date") is the cutoff for being entitled to the next dividend payment. If you buy the stock on or after the ex-dividend date, the seller — not you — receives the upcoming dividend; you must own the shares before the ex-dividend date to be paid. Share prices typically open lower by roughly the dividend amount on the ex-dividend date to reflect the payout leaving the company. This calculator does not model specific ex-dividend dates.

The record date is the date a company checks its books to determine which shareholders are entitled to the dividend — you must be on the record as a holder on that date to be paid. In the U.S., the ex-dividend date is generally set one business day before the record date to reflect standard trade settlement, so buying on or after the ex-dividend date means you will not appear on the record and will not receive that dividend. Companies also announce a declaration date (when the dividend is approved) and a payment date (when the cash is actually distributed).

By default it assumes a 3% dividend yield, 5% annual dividend growth, 5% annual share-price growth, and quarterly dividends. These are hypothetical starting points based on long-run historical averages for diversified, dividend-paying equities — not predictions. You can adjust every assumption; actual results vary with the specific investments, market conditions, fees, and taxes.

In a standard taxable brokerage account, dividends are generally taxable in the year received, even if reinvested. Qualified dividends are typically taxed at long-term capital gains rates and ordinary dividends as regular income, while dividends in tax-advantaged accounts like IRAs are generally not taxed until withdrawal (if at all). Tax treatment depends on your situation — consult a qualified tax professional. This calculator does not account for taxes.

The calculator simulates monthly. Each period, your share price grows at the expected annual appreciation rate and your dividend per share grows at the dividend growth rate, both converted to monthly-compounded equivalents.