● Dividend income · DRIP · Yield on cost

Dividend Calculator

Q: What is a good dividend yield?

2–4% is typical for quality dividend stocks (S&P 500 average ≈ 1.5%). Yields above 6–7% may signal a dividend cut risk — the yield is "high" because the stock price has fallen. Always check the payout ratio and earnings coverage.

Q: Should I reinvest dividends (DRIP)?

Almost always yes, when you're in accumulation mode. DRIP amplifies compounding by putting dividends to work immediately. Exception: when in retirement and living off income, cash dividends provide spending money without needing to sell shares.

Q: Are dividends taxed?

Yes. In the US: qualified dividends are taxed at 0/15/20% (capital gains rates, lower than income tax). Ordinary dividends are taxed at your income tax rate. In tax-advantaged accounts (IRA, 401k), dividends compound tax-deferred or tax-free.

Q: Are my results saved? Do I need an account?

No account or sign-up needed. Every calculation is saved automatically in your own browser, and you can also pin a result with the save button. Nothing is sent to any server: the data stays on your device and can be erased at any time with the clear button.

Q: How do I track my progress over time?

From the fourth entry onward a “View comparison chart” button appears, opening a line chart with every entry in time order plus an indicator panel: total change, average per entry, lowest and highest value and the period covered. You can also export the history as CSV.

Calculate your annual dividend income, yield on cost, and how much wealth you'd build by reinvesting every dividend (DRIP) over time.

$50,000 invested in stocks yielding 3.5% generates $1,750/year in dividends. With DRIP (dividend reinvestment) and 5% annual dividend growth, that same investment produces $5,847/year in dividends after 20 years — and the portfolio grows to $186,000. Reinvesting dividends is one of the most powerful wealth-building strategies.

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Dividend Calculator

Investment · Yield · DRIP · Dividend growth · Years

⚙️

Your investment

Total investment

Dividend yield (current)

% /yr

Annual dividend growth rate

% /yr

Annual share price growth

% /yr

Investment horizon

years

Reinvest dividends (DRIP)

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Results

Annual dividend income (year 1)

—

Monthly income (year 1)

—

Annual dividend income (final year)

—

Total dividends received

—

Portfolio value at end

—

Total return (portfolio + dividends)

—

How it's calculated

DRIP: dividend reinvestment compounding

Year 1 dividend = Investment × yield% With DRIP: Portfolio(t) = Portfolio(t-1) × (1 + price_growth%) + dividend(t) Dividend(t) = Portfolio(t-1) × yield% × (1+div_growth%)^t Without DRIP: Portfolio(t) = Initial × (1 + price_growth%)^t Dividend(t) = Initial × yield% × (1+div_growth%)^t Yield on cost = Current annual dividend / Original cost × 100

1
First-year dividends
—
2
Dividends in the final year
—
3
Total dividends collected
—
4
Final portfolio value
—

Dividend yield: Annual dividends per share ÷ current share price. A 3.5% yield on $100 stock = $3.50/year in dividends.
DRIP (Dividend Reinvestment Plan): Automatically reinvests cash dividends to buy more shares, compounding returns without additional capital.
Yield on cost (YoC): Annual dividend income ÷ original cost. A 3% yield on a stock bought 20 years ago may now have 10% yield on cost after dividend growth.
Payout ratio: % of earnings paid as dividends. <60% is generally sustainable for most sectors.

🔢 Worked example

A $200,000 portfolio yielding 3% pays $6,000 in year one — about $500/month. With DRIP and dividend growth, that income compounds each year.

Disclaimer: assumes constant growth rates. Actual dividends can be cut or suspended. Diversify across sectors to reduce single-stock dividend risk. Always confirm with an official source before deciding.

Frequently asked questions

What is a good dividend yield?

2–4% is typical for quality dividend stocks (S&P 500 average ≈ 1.5%). Yields above 6–7% may signal a dividend cut risk — the yield is "high" because the stock price has fallen. Always check the payout ratio and earnings coverage.

Should I reinvest dividends (DRIP)?

Almost always yes, when you're in accumulation mode. DRIP amplifies compounding by putting dividends to work immediately. Exception: when in retirement and living off income, cash dividends provide spending money without needing to sell shares.

Are dividends taxed?

Yes. In the US: qualified dividends are taxed at 0/15/20% (capital gains rates, lower than income tax). Ordinary dividends are taxed at your income tax rate. In tax-advantaged accounts (IRA, 401k), dividends compound tax-deferred or tax-free.

Are my results saved? Do I need an account?

No account or sign-up needed. Every calculation is saved automatically in your own browser, and you can also pin a result with the save button. Nothing is sent to any server: the data stays on your device and can be erased at any time with the clear button.

How do I track my progress over time?

From the fourth entry onward a “View comparison chart” button appears, opening a line chart with every entry in time order plus an indicator panel: total change, average per entry, lowest and highest value and the period covered. You can also export the history as CSV.

About this calculator

The dividend calculator estimates the passive income you can expect from a portfolio of dividend-paying assets. You enter the amount invested and the dividend yield, and it shows the income you would receive per month and per year, giving you a clear picture of your cash flow.

It is a useful way to gauge how much capital you need to reach an income goal, or how reinvesting dividends can grow your holdings over time. Yields and payouts vary and are never guaranteed, so treat the results as an estimate for planning rather than a promise of returns.

By Vinicius Fonseca · Reviewed against official sources · Updated Jul 2026 · How we calculate →