Dividend Calculator
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Project how much passive income a dividend portfolio will generate over time, including the compounding effect of reinvesting every payout back into more shares (DRIP). Everything is computed privately in your browser.
How the dividend projection is calculated
The calculator steps forward one year at a time. In year one it multiplies your share count by the annual dividend per share to produce your income. If you entered a yield instead of a dollar figure, it first converts it: dividend per share equals share price multiplied by the yield percentage. Each following year, the dividend per share is grown by your annual dividend growth rate, compounding as (1 + growth) raised to the number of years elapsed.
When DRIP is switched on, the whole dividend paid in a year is divided by the share price to work out how many new shares it buys, and those shares are added to your holding before the next year is calculated. That is the engine behind dividend compounding: more shares produce more dividends, which buy still more shares.
Why reinvesting dividends matters so much
Dividend reinvestment is one of the most reliable forms of compounding available to an ordinary investor. Because the payout itself is used to buy more of the income-producing asset, growth accelerates over long horizons even if the dividend per share never changed. Layer a rising dividend on top and the two effects multiply.
Historically, a large share of the total return of broad equity indices has come from reinvested dividends rather than price appreciation alone. That is why long-term investors care about the difference between spending dividends as cash and rolling them straight back into the position.
Assumptions and caveats to keep in mind
This is a projection, not a guarantee. A few simplifying assumptions keep the model transparent, and you should read the output with them in mind.
- The share price is held constant for reinvestment, so real fractional-share purchase amounts may differ if the price moves.
- Dividends are assumed to be paid and reinvested once per year rather than quarterly, which slightly understates real-world compounding frequency.
- Taxes, brokerage fees and dividend cuts are not modelled; a company can reduce or suspend its dividend at any time.
- A very high growth rate compounded over many years is optimistic. Mature dividend payers typically raise payouts in the low-to-mid single digits.
Reading the results table
The year-by-year table shows, for each year, your share count, the dividend per share after growth, that year's income, the shares bought through DRIP, cumulative income to date, and the total portfolio value at that year's price. The summary tiles above it give the headline numbers: total dividend income over the whole period, the income in the final year, your ending share count, the projected portfolio value, and your original investment for comparison.
Frequently asked questions
Should I enter dividend per share or yield?
Use whichever you have. If you know the annual dollar dividend per share, enter that. If you only know the yield, switch the input mode and enter the percentage; the tool converts it using your share price.
How is dividend growth applied?
The growth rate compounds annually on the dividend per share. In year one the dividend is your starting figure; in year two it is multiplied by (1 + growth), in year three by (1 + growth) squared, and so on.
Does DRIP buy fractional shares?
Yes. The model allows fractional shares, which most modern brokers and formal dividend reinvestment plans support. The exact income into a coin-count matters less than the compounding trend it illustrates.
Why is my final-year income higher than total income divided by years?
Because both your share count and your dividend per share grow over time. Later years produce far more income than early years, so the final year is well above the simple average.
Are taxes included?
No. Dividends are often taxable in the year received even when reinvested. Treat the output as pre-tax and adjust for your own jurisdiction and account type.
Can I use this for index funds or ETFs?
Yes. Enter the fund's share price and its distribution per share (or its distribution yield). The same reinvestment and growth logic applies to fund distributions.
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