acalculator

How will my dividend income grow?

Enter what you invest, the share price, and the dividend yield. See your dividend income each year and what your investment could be worth, with or without reinvesting.

Your numbers

Yearly dividends ÷ share price.
Dividends are paid
Growth, additions and tax
Your investment will be worth
$46,373.83

Investing $10,000.00 at a 4% yield for 20 years grows to $46,373.83, paying $2,506.35 in dividends in the last year.

Dividends in the last year
$2,506.35
Total dividends
$22,840.01
Money put in
$10,000.00
Yield on cost
25.06%
Shares at the end
513.521
Value of your shares
$46,373.83
Months
240

Your investment will be worth: $46,373.83. Investing $10,000.00 at a 4% yield for 20 years grows to $46,373.83, paying $2,506.35 in dividends in the last year.

How much do you get in dividends each year?

What is your investment worth?

What does each year look like?

The results are estimates for information only. They are not financial, tax, or legal advice. Check the numbers with your lender or a qualified professional before you decide. Terms of use

How to calculate

Projects the dividend income and value of a dividend stock or fund from its yield, dividend growth, price growth, and reinvestment (DRIP), with optional monthly additions.

Example with the default inputs (Amount invested $10,000.00, Share price today $50.00, Dividend yield 4%, For how long? (years) 20, Dividends are paid Quarterly, Reinvest dividends (DRIP) Yes, Dividend growth each year 5%, Share price growth each year 3%, Add each month $0.00, Tax on dividends 0%): Investing $10,000.00 at a 4% yield for 20 years grows to $46,373.83, paying $2,506.35 in dividends in the last year.

Method: Each month the price is P × (1 + g)^(m/12); in a payout month the dividend is shares × P × yield × (1 + d)^(year − 1) ÷ payouts a year, less tax, and with DRIP it buys shares at that month’s price.

  • The yield is the yearly dividend per share as a percent of today’s price, and the dividend per share rises once a year.
  • The share price grows smoothly at a steady yearly rate. Real prices and dividends go up and down, and dividends can be cut.
  • Dividends are paid at the end of the months that end each payout period (quarterly: months 3, 6, 9, 12).
  • Reinvested dividends and monthly additions buy shares (including fractions) at that month’s price, with no fees.
  • This is an estimate for planning, not financial advice.

Machine-readable copies: Markdown, JSON.

Worked examples

Each example is checked against the calculator on every build.

  1. Amount invested $5,000.00, Share price today $50.00, Dividend yield 4%, For how long? (years) 1, Dividends are paid Quarterly, Reinvest dividends (DRIP) no, Dividend growth each year 0%, Share price growth each year 0% gives Total dividends $200.00, Dividends in the last year $200.00, Value of your shares $5,000.00, Your investment will be worth $5,200.00, Shares at the end 100, Yield on cost 4%.Source: hand calculation in content.mdx: 100 shares × $2 a year
  2. Amount invested $10,000.00, Share price today $50.00, Dividend yield 4%, For how long? (years) 1, Dividends are paid Quarterly, Reinvest dividends (DRIP) yes, Dividend growth each year 0%, Share price growth each year 0% gives Shares at the end 208.120802, Your investment will be worth $10,406.04, Total dividends $406.04.Source: hand calculation in content.mdx: each quarter the shares grow by 1%, 200 × 1.01⁴
  3. Amount invested $10,000.00, Share price today $50.00, Dividend yield 4%, For how long? (years) 2, Dividends are paid Yearly, Reinvest dividends (DRIP) no, Dividend growth each year 10%, Share price growth each year 5%, Tax on dividends 15% gives Total dividends $714.00, Dividends in the last year $374.00, Value of your shares $11,025.00.Source: hand calculation in content.mdx: 200 × 2 × 0.85 = 340, then 200 × 2.20 × 0.85 = 374; 200 × 50 × 1.05²
  4. Amount invested $10,000.00, Share price today $50.00, Dividend yield 4%, For how long? (years) 20, Dividends are paid Quarterly, Reinvest dividends (DRIP) yes, Dividend growth each year 5%, Share price growth each year 3% gives Your investment will be worth $46,373.83, Shares at the end 513.521361, Dividends in the last year $2,506.35.Source: month by month with the steps in content.mdx; checked in Python (docs/progress/WP-32/python/dividend.py)

How it is worked out

The calculator runs month by month for the years you choose. With today’s share price P, the yield y, the yearly dividend growth d, the yearly price growth g, and the payouts a year f (12, 4, 2, or 1), all rates as decimals:

  • Shares today = amount invested ÷ P.
  • Price at the end of month m (m = 1, 2, …) = P × (1 + g)^(m ÷ 12).
  • Yearly dividend per share in year k (k = 1, 2, …) = P × y × (1 + d)^(k − 1). It is paid in f equal parts.
  • Payout months are the months m where m is a multiple of 12 ÷ f (quarterly: months 3, 6, 9, 12, 15, …).

At the end of each month:

  1. In a payout month, the dividend = shares × (yearly dividend per share ÷ f) × (1 − tax rate).
  2. With DRIP on (the default), the dividend buys dividend ÷ price more shares at that month’s price. With DRIP off, it is kept as cash.
  3. A monthly addition buys addition ÷ price more shares.

Empty optional fields count as 0 (and DRIP as on). If the value grows too large for a number to hold (above about 1.8 × 10^308, for example a dividend that grows 30% a year for decades on a flat price), there is no answer.

The results:

  • Your investment will be worth = shares at the end × the price at the end, plus any dividends kept as cash.
  • Dividends in the last year adds the dividends of the last 12 months, after tax. Total dividends adds every dividend.
  • Money put in = the amount invested + the monthly addition × the months.
  • Yield on cost = dividends in the last year ÷ money put in, as a percent (left out when nothing, or less than a cent, was put in).

Assumptions

  • Prices and dividends grow at steady rates; real ones go up and down, and dividends can be cut.
  • Shares, including fractions, are bought at that month’s price, with no fees.
  • This is an estimate for planning, not financial advice.

Worked examples by hand

$5,000 in a $50 stock with a 4% yield, quarterly, one year, dividends kept as cash, no growth. You own 5,000 ÷ 50 = 100 shares. The yearly dividend is 50 × 0.04 = $2.00 a share, paid as $0.50 a quarter: 4 × 100 × 0.50 = $200. The shares are still worth $5,000, so the total is $5,200, and the yield on cost is 4%.

$10,000 (200 shares) with DRIP on. Each quarter the dividend is shares × $0.50, which buys shares × 0.50 ÷ 50 = 1% more shares. After four quarters you own 200 × 1.01^4 = 208.120802 shares, worth $10,406.04, and the dividends were 10,000 × (1.01^4 − 1) = $406.04.

Yearly dividends for 2 years, 10% dividend growth, 5% price growth, 15% tax, no DRIP. Year 1: 200 × $2.00 × 0.85 = $340. Year 2: the dividend per share is $2.20, so 200 × 2.20 × 0.85 = $374. Total dividends $714. The 200 shares are worth 200 × 50 × 1.05² = $11,025.

$10,000, $50 share, 4% yield, quarterly, DRIP, 5% dividend growth, 3% price growth, 20 years. Month by month with the steps above, you end with 513.52 shares worth $46,373.83, and $2,506.35 of dividends in the last year.

Other questions people ask

What is a dividend yield?

It is the yearly dividend per share divided by the share price. A $50 share that pays $2 a year has a 4% yield. If you invest $10,000, you own 200 shares and receive $400 a year before tax.

What is a DRIP?

A dividend reinvestment plan (DRIP) uses each dividend to buy more shares, often including fractions of a share, instead of paying you cash. Those new shares earn dividends too, so income grows faster. Many companies and brokers offer this.

What is dividend growth?

Many companies raise their dividend over time. With 5% dividend growth, a $2.00 yearly dividend per share becomes $2.10 the next year. Dividends are not guaranteed: a company can also cut or stop them.

What is yield on cost?

It is your yearly dividend income divided by the money you put in. If dividends grow, your yield on cost rises even though the stock’s current yield may not.

Are dividends taxed?

In a taxable US account, yes. Qualified dividends are taxed at the lower long-term capital gains rates, and other (ordinary) dividends at your income tax rate. Reinvested dividends are taxed the same as cash. Enter your rate under "Growth, additions and tax" to see income after tax.

Why is my answer different from what I actually get?

The calculator uses steady growth rates. Real share prices move every day, dividends change, and you may pay fees. Use it to see how yield, growth, and reinvesting add up over time, not to predict a stock.