How to use the calculator
- Type a ticker (for example KO, JNJ or SCHD) and click Fill in to load its latest price, dividend yield and 5-year dividend growth from Quotelinks data. You can also type the numbers yourself.
- Enter the amount you invest, how fast you expect the dividend and the share price to grow, the number of years and any monthly addition.
- Choose whether to reinvest dividends (DRIP) or take them as cash. Open Advanced to set your dividend tax rate and how often the dividend is paid.
How the projection works
The calculator goes month by month. The share price grows at the price growth rate; the dividend per share starts at yield × price and rises once a year at the dividend growth rate. On each payment date you receive the dividend on all the shares you hold. After tax, it buys more shares at that day’s price (DRIP), or it is kept as cash. Monthly additions buy shares at the end of each month.
Yield on cost is this year’s dividends divided by the money you put in yourself (reinvested dividends don’t count as money put in). It shows how a growing dividend raises the income on your original investment, even when the current yield stays about the same.
Example: $25,000 at a 3% yield for 20 years
250 shares at $100, dividends growing 6% a year, the price growing 5% a year, paid quarterly, 15% tax on dividends:
| After 20 years | DRIP | Take cash |
|---|---|---|
| Shares | 429 | 250 |
| Dividends in year 20 | $3,825 ($3,251 after tax) | $2,269 |
| Yield on cost | 15.3% | 9.1% |
| Shares value | $113,863 | $66,332 |
| Cash collected | – | $23,451 |
| Total | $113,863 | $89,783 |
Reinvesting adds $24,080. In an IRA or 401(k), with no tax on the dividends, the DRIP total rises to $125,207. Adding $500 a month on top takes it to $397,210, with $13,248 of dividends in year 20.
Dividends and taxes
- Reinvested dividends are still taxed in a taxable account in the year they are paid, even though you never receive the cash.
- In the US, qualified dividends from most US companies held long enough are taxed at the lower long-term capital gains rates; other dividends are taxed as ordinary income.
- Inside an IRA, 401(k) or similar account, set the tax to 0.
Common mistakes
- Chasing the highest yield. A very high yield often means the market expects a cut. Look at the dividend growth history and the payout ratio too; the stock screener shows both.
- Assuming dividends always grow. Companies can cut or stop dividends, especially in recessions.
- Ignoring price growth. Total return is price growth plus dividends. A stock with a high yield and a falling price can lose money. Measure past total returns with the investment return calculator.
Frequently asked questions
What is a DRIP?
A dividend reinvestment plan: instead of paying dividends out as cash, your broker or the company uses them to buy more shares, usually including fractional shares and without a commission. More shares then earn more dividends, which compounds the income.
Is it better to reinvest dividends or take the cash?
If you don't need the income yet, reinvesting usually builds a larger portfolio and a larger future income, as the comparison table shows. Taking cash makes sense when you live on the income or want to invest it elsewhere, for example to rebalance.
What is yield on cost?
This year's dividends divided by the money you invested yourself. If you bought at $100 a share and the dividend has grown to $15 a share, your yield on cost is 15%, even if the current yield is still about 3%.
Where does the ticker lookup get its data?
From the same end-of-day data as the Quotelinks stock and ETF pages: the latest close, the dividend yield (forward for stocks, the last 12 months for ETFs) and the 5-year dividend growth rate where there is enough dividend history. Check them before relying on the result.
Are reinvested dividends taxed?
In a taxable account, yes: dividends are taxed in the year they are paid whether you reinvest them or not. In an IRA, 401(k) or similar account they are not taxed while they stay in the account.
What dividend growth rate should I use?
The 5-year dividend growth the lookup fills in is a starting point. Long-term rates above 8–10% a year are hard to sustain, so a more conservative figure is often sensible.
Can I put this calculator on my website?
Yes. It is free for any site. Use the embed code generator at the bottom of this page, copy the code and paste it into your page. Please keep the credit line with the two links under the calculator.
Related calculators
- Dividend Income CalculatorYearly and monthly dividend income from your stocks and ETFs, with a month-by-month calendar.
- Dividend Discount Model CalculatorFair value of a dividend stock with the Gordon growth or two-stage model, and the growth priced in.
- Compound Interest CalculatorHow a starting amount and monthly savings grow over time, after fees, tax drag and inflation.
- Stock Return Calculator With DividendsTotal return, price return and the part added by dividends for any stock or ETF between two months.
See all free investing calculators, or add live stock quotes to your site with the free stock widgets.
Add this calculator to your website
The calculator is free to embed on any website, personal or commercial, and works on WordPress, Blogger, Wix, Squarespace, Webflow, Ghost and plain HTML. Choose the options, copy the code and paste it into your page.
Preview: this is how the calculator and the credit line will look on your page
Free for personal and commercial websites. Please keep the “by Quotelinks” credit line under the calculator visible and unchanged, and don’t modify the calculator or present it as your own. The <script> line is optional: it sizes the frame to fit the calculator; if your platform removes scripts, the calculator still works at the fixed height. Dividends can be cut and prices can fall; the projection assumes steady growth. For illustration only, not financial advice.