Estimate how reinvesting dividends may increase your
investment over time. Model share-price growth, dividend
growth, payment frequency, taxes, additional shares,
future dividend income, and total portfolio value.
Enter Your Dividend Investment
Add your investment, stock price, dividend,
growth assumptions, tax rate, and DRIP period.
$
Starting amount invested in the dividend-paying asset.
$
Market price per share when the calculation begins.
$
Total dividend currently paid per share each year.
%
Assumed annual change in the stock or fund price.
%
Assumed annual growth in dividend per share.
%
Optional tax withheld before dividends are reinvested.
years
Length of time dividends are modeled as reinvested.
What Is a Dividend Reinvestment Calculator?
A Dividend Reinvestment Calculator estimates how an
investment may grow when cash dividends are used to
purchase additional shares instead of being withdrawn
from the account.
As additional shares are accumulated, those shares can
potentially earn future dividends of their own. This
creates a compounding effect that can become increasingly
significant over longer investment periods.
This calculator models share-price growth, dividend
growth, payment frequency, optional dividend taxes,
fractional shares, and automatic reinvestment.
How the Dividend Reinvestment Calculator Works
1
Enter Your Investment
Add your starting investment, share price,
and current annual dividend per share.
Dividend Payment =
Shares Owned × Dividend per Share for the Period
Reinvested Shares Formula
New Shares Purchased =
Net Dividend Payment ÷ Current Share Price
Each new share becomes part of the portfolio and
participates in subsequent dividend payments.
Dividend Reinvestment Example
Suppose you invest
$10,000 in shares trading at
$50 each.
Initial Investment:
$10,000
Starting Share Price:
$50
Starting Shares:
200
Annual Dividend:
$2 per share
Starting Dividend Yield:
4%
Payment Frequency:
Quarterly
During each modeled quarter, the calculator estimates
the dividend payment generated by the shares owned and
uses the after-tax dividend to purchase additional
fractional shares at the modeled share price.
How Dividend Reinvestment Can Compound
More Shares
Each dividend payment can purchase additional shares.
Over time, this can increase the total number of shares
owned without requiring an additional cash investment.
More Future Dividends
Because dividends are generally calculated per share,
owning more shares can increase future dividend payments.
Dividend Growth
If the dividend per share also increases over time,
the combination of more shares and higher dividends
can further increase modeled dividend income.
Share Price Changes
Stock price changes have two effects. Rising prices
increase portfolio value but allow each dividend payment
to purchase fewer new shares. Falling prices can reduce
portfolio value while allowing dividends to purchase
more shares.
Reinvesting Dividends vs. Taking Cash
When dividends are taken as cash, the investor receives
income but the number of shares generally remains
unchanged.
When dividends are reinvested, the dividend payment
purchases additional shares. Those additional shares
may then contribute to both future portfolio value and
future dividend income.
The calculator's DRIP value-added result compares the
modeled reinvested portfolio with the value of only the
original shares at the estimated ending share price.
Important Dividend Reinvestment Assumptions
Real investments do not normally grow at constant rates.
Share prices may change substantially between dividend
payments, and dividend amounts can change at any time.
Some brokers may also apply different treatment to
fractional shares, foreign dividends, withholding taxes,
commissions, or dividend reinvestment programs.
Important:
This calculator provides an informational mathematical
projection only. Dividends are not guaranteed and may
be reduced or eliminated. Share-price returns can also
be negative. Taxes and investment rules vary by
jurisdiction and account type.
Dividend Reinvestment Calculator FAQs
Dividend reinvestment means using cash dividends received from an investment to purchase additional shares instead of taking the dividend as cash. Those additional shares may then generate their own future dividends.
The calculator starts with your investment and share price, estimates dividends during each payment period, deducts any dividend tax rate entered, and reinvests the remaining dividend into additional shares at the modeled share price.
DRIP stands for Dividend Reinvestment Plan. It generally refers to a program or strategy that automatically uses dividend payments to purchase additional shares of the same investment.
Yes. If dividends per share increase over time, the investment may generate larger dividend payments, which can purchase additional shares and increase future dividend income.
Yes. Higher share prices increase the value of existing shares but also mean each dividend payment purchases fewer additional shares. Lower prices allow the same dividend amount to purchase more shares.
No. Dividends can be increased, reduced, suspended, or eliminated, and share prices can rise or fall. The calculator provides a mathematical projection using the assumptions entered.