Does this calculator account for quarterly dividends?

Not explicitly. It uses an annualized model for simplicity. For many planning purposes, annual approximations are close enough to show the power of reinvestment, but actual quarterly timing will differ.

What if the share price does not grow with the dividend?

In reality, dividend growth and share price movement are related but not perfectly linked. This tool applies a single growth rate to both as a teaching aid. You can interpret the growth rate as a rough blended assumption for income and price.

Are taxes on dividends included?

No. The calculator assumes you can reinvest the full dividend amount with no drag from taxes. In taxable accounts, your after‑tax reinvestment will be lower if dividends are not qualified or your tax rate is high.

Can dividends be cut or suspended in this model?

The model assumes constant growth and does not include dividend cuts or suspensions. If you are worried about cuts, you may want to use very conservative growth assumptions or explore stress‑test scenarios separately.

Is this a forecast of future returns?

No. It is an educational illustration of compounding with reinvested dividends under steady assumptions. Real‑world returns will vary and may be higher or lower than the modeled results.

finance calculator

Stock Dividend DRIP Calculator

Model dividend reinvestment (DRIP) over time with growing dividends and share count as dividends buy additional shares.

Results

Ending shares: 134.39
Total dividends received: $1,892
Total value (shares × price): $8,191

How to use this calculator

Enter your starting number of shares in the company or ETF you are modeling.
Enter the current share price and the current dividend yield (for example, 3% or 4.5%).
Enter the expected annual dividend growth rate. For stable dividend growers, this might be in the 2–8% range; you can test multiple assumptions.
Choose how many years you want to model dividend reinvestment and growth.
Review the outputs to see how your share count, total dividends received, and portfolio value evolve over the chosen timeframe.
Adjust yield, growth, and years to compare conservative vs aggressive DRIP scenarios.

Inputs explained

Starting shares: The number of shares you own at the beginning of the simulation. This includes any fractional shares you already have through past reinvestment.
Share price: The current market price per share. We use this as the starting point for both dividend calculations and reinvestment pricing.
Dividend yield (%): The annual dividend expressed as a percentage of the share price. For example, if a $50 stock pays $1.50 per share in dividends per year, the yield is 3%.
Dividend growth per year (%): The expected annual growth rate of the dividend. In this simplified model, we also apply this rate to the share price to illustrate how both income and value can grow together.
Years to reinvest: How long you plan to keep reinvesting dividends instead of taking them in cash. Longer horizons give compounding more time to work.

How it works

We start with your current share count, share price, and dividend yield. The yield tells us how much dividend income you receive per year relative to the share price.

Each year, we calculate dividends per share as share price × dividend yield, then multiply by your current share count to get total annual dividends.

Instead of taking those dividends in cash, we assume they are reinvested at the then‑current share price, buying fractional additional shares. This increases your share count for the next year.

We also apply the dividend growth rate as a simplified driver of both dividend per share and share price growth over time. This is a modeling shortcut to show what a growing dividend and modest price appreciation might look like when combined with reinvestment.

Year after year, this loop repeats: updated share price and dividend per share → dividends paid → dividends reinvested into more shares → higher share count going into the next year.

At the end of your chosen timeframe, we report ending shares, total dividends you received over the period, and the final portfolio value (ending shares × ending share price).

Formula

For each year n from 1 to N:\n\n1. Dividend per shareₙ = Priceₙ₋₁ × Dividend yield\n2. Total dividendsₙ = Sharesₙ₋₁ × Dividend per shareₙ\n3. New shares from DRIPₙ = Total dividendsₙ ÷ Priceₙ₋₁\n4. Sharesₙ = Sharesₙ₋₁ + New shares from DRIPₙ\n5. Priceₙ = Priceₙ₋₁ × (1 + Dividend growth rate)\n\nAt the end of N years:\n\n• Ending shares = Sharesᴺ\n• Total dividends received = sum of Total dividendsₙ over all years\n• Total value = Ending shares × Priceᴺ

When to use it

Illustrating the power of DRIP investing to a new investor by showing how small dividend payments can compound into more shares and higher income over decades.
Comparing different dividend stocks or ETFs by testing various yields and dividend growth rates to see which combinations create faster share and income growth.
Checking how much more you might have after 10, 20, or 30 years if you reinvest dividends instead of taking them as cash, especially inside a tax‑advantaged account.
Visualizing the trade‑off between a high current yield with lower growth versus a lower initial yield with higher dividend growth over time.
Rough‑cut planning for retirement income by seeing how many shares and how much annual dividend income a DRIP strategy might produce after a long accumulation phase.

Tips & cautions

For conservative modeling, consider using a modest dividend growth rate and a slightly lower investment return than historical averages to avoid over‑promising future income.
If you think the share price will be more volatile than the dividend, you can mentally separate the two—treat the price path as a rough average rather than a prediction.
Remember that reinvesting dividends works especially well inside tax‑advantaged accounts (such as retirement plans) where you are not paying tax each year on dividends.
If you are nearing or in retirement, you can run one scenario with DRIP turned on (conceptually) and another where dividends are taken as cash to see the trade‑off between income now and growth later.
Use the calculator’s outputs as a conversation starter, not a guarantee—real stocks can cut dividends, change policies, or experience long periods of underperformance.
This is a simplified DRIP illustration: it assumes dividends and share price grow at the same constant rate each year, which is rarely true in real markets.
Dividends are assumed to be paid and reinvested once per year; many real‑world DRIPs operate quarterly or on different schedules.
Taxes, trading fees, bid‑ask spreads, and dividend withholding are not modeled; all dividends are treated as if they can be reinvested at no cost.
The calculator does not consider dividend cuts, suspensions, special dividends, or changes in payout policy over time.
Historical performance does not guarantee future results—this is a planning and education tool, not a forecast engine.

Worked examples

100 shares @ $50, 3% yield, 2% dividend growth, 10 years

Start with 100 shares at $50 each and a 3% dividend yield; expected dividend per share in year 1 is $1.50.
In year 1, total dividends ≈ 100 × $1.50 = $150. Reinvesting at $50/share buys 3 additional shares, bringing you to 103 shares.
Each year, the dividend per share and price grow by 2%, so both your dividends and portfolio value climb.
By year 10, this simplified model yields roughly 135.8 shares, total dividends around $4,638 over the 10‑year period, and an ending value near $6,789 (based on the modeled price path).

Comparing higher yield vs higher growth

Scenario A: 4% yield with 2% dividend growth; Scenario B: 2% yield with 6% dividend growth, same starting shares and price.
Run the calculator for each scenario over 20 years, keeping starting shares and share price constant.
Interpretation: Scenario A may offer higher income early on, while Scenario B can catch up or surpass over time as the faster growth compounds.
This helps illustrate why investors sometimes favor lower‑yield, higher‑growth dividend stocks for long horizons.

Long‑term accumulation in a tax‑advantaged account

Assume 150 starting shares at $40, 3.5% yield, and 4% annual dividend/price growth over 25 years with automatic reinvestment.
Use the calculator to estimate ending shares, total dividends, and final value after 25 years.
Interpretation: the results can show how a modest initial position, left to compound quietly, may become a meaningful income‑producing asset by retirement.

Deep dive

Use this dividend DRIP calculator to model how reinvesting dividends, combined with dividend growth, can increase your share count, total dividends received, and portfolio value over time.

Enter starting shares, share price, dividend yield, dividend growth, and years to see a simplified projection of DRIP compounding for dividend stocks or ETFs.

Ideal for long‑term investors who want to visualize the impact of automatic dividend reinvestment in a brokerage or retirement account and compare different dividend strategies.

FAQs

Does this calculator account for quarterly dividends?: Not explicitly. It uses an annualized model for simplicity. For many planning purposes, annual approximations are close enough to show the power of reinvestment, but actual quarterly timing will differ.
What if the share price does not grow with the dividend?: In reality, dividend growth and share price movement are related but not perfectly linked. This tool applies a single growth rate to both as a teaching aid. You can interpret the growth rate as a rough blended assumption for income and price.
Are taxes on dividends included?: No. The calculator assumes you can reinvest the full dividend amount with no drag from taxes. In taxable accounts, your after‑tax reinvestment will be lower if dividends are not qualified or your tax rate is high.
Can dividends be cut or suspended in this model?: The model assumes constant growth and does not include dividend cuts or suspensions. If you are worried about cuts, you may want to use very conservative growth assumptions or explore stress‑test scenarios separately.
Is this a forecast of future returns?: No. It is an educational illustration of compounding with reinvested dividends under steady assumptions. Real‑world returns will vary and may be higher or lower than the modeled results.

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This stock dividend DRIP calculator is for educational and planning purposes only. It uses simplified assumptions about yield, growth, price behavior, and reinvestment, and it does not model taxes, transaction costs, or changes in dividend policy. Investing in stocks and ETFs involves risk, including the possible loss of principal. Consider speaking with a qualified financial advisor before making investment decisions.