Dividend Calculator
Calculate dividend yield, final balance, growth, and dividend profit using a simple DRIP model.
Inputs
Results
Use this Dividend Calculator to estimate dividend yield and the potential growth of an investment when dividends are reinvested. Enter the share price, annual dividend per share, amount invested, time period, and assumed reinvestment frequency.
Important: This calculator uses a simplified dividend-reinvestment model. Actual dividends, stock prices, reinvestment prices, taxes, fees, and investment returns can change over time.
Dividend Yield Formula
Dividend yield compares the annual dividend paid per share with the share price:
Dividend yield = annual dividend per share ÷ share price × 100
The estimated number of shares initially purchased is:
Starting shares = amount invested ÷ share price
Estimated annual dividend income before reinvestment is:
Annual dividend income = starting shares × annual dividend per share
Dividend Reinvestment Growth
The calculator uses the dividend yield as a simplified compound-growth rate:
Final balance = P × (1 + r ÷ m)m × t
Where:
- P = initial investment
- r = dividend yield as a decimal
- m = assumed reinvestment periods per year
- t = number of years
The estimated gain from reinvested dividends is:
Estimated dividend gain = final balance − initial investment
Overall estimated growth is:
Overall growth = estimated dividend gain ÷ initial investment × 100
Worked Example
Suppose a stock has:
- Share price: $50
- Annual dividend per share: $2
- Investment amount: $5,000
- Time period: 5 years
- Assumed reinvestment frequency: quarterly
Dividend yield:
($2 ÷ $50) × 100 = 4%
Estimated starting shares:
$5,000 ÷ $50 = 100 shares
Initial annual dividend income:
100 × $2 = $200
Using the calculator’s simplified quarterly reinvestment model:
Final balance = $5,000 × (1 + 0.04 ÷ 4)4 × 5
Final balance ≈ $6,100.95
Estimated dividend gain:
$6,100.95 − $5,000 = $1,100.95
Estimated overall growth:
$1,100.95 ÷ $5,000 × 100 ≈ 22.02%
Important Notes
- Dividend yield can change whenever the stock price or dividend payment changes.
- Companies are not required to maintain the same dividend and may increase, reduce, suspend, or discontinue dividends.
- The calculator assumes a constant share price and constant annual dividend per share throughout the projection.
- The selected compounding frequency represents an assumed reinvestment schedule and may not match the company’s actual dividend-payment schedule.
- Actual DRIP purchases may occur at different market prices, so the number of shares acquired will vary.
- Some dividend reinvestment plans or brokers may charge fees or have specific fractional-share rules.
- Taxes on dividends are not included.
- Capital gains or losses from changes in the stock price are not included, so the result is not a complete total-return calculation.
- A high dividend yield alone does not indicate that a stock is a better or safer investment.