Dividend Income Calculator
Project dividend income from a position, with or without reinvestment. Enter what you'd invest, the current dividend and share price, and an assumed growth rate — nothing to sign up for, and the numbers update as you type.
Current yield
3.00%
Annual dividend ÷ share price, today
Shares owned
250
Investment ÷ share price
Annual income (today)
$300
At today's shares and rate
Monthly income (avg)
$25
Annual income ÷ 12
Quarterly income (avg)
$75
Annual income ÷ 4
Yield on cost (after 10 yr)
7.22%
Forward run-rate ÷ original investment
Income run-rate (after 10 yr)
$722
Forward rate, incl. DRIP shares
Cumulative dividends (10yr)
$4,597
Sum of all dividend cash generated
Position value (yr 10)
$24,067
Projected shares × projected price
Starting position: $10,000 buys 250 shares at $40.00, yielding 3.00% and $300 in the first year.
After 10 years with DRIP: reinvested dividends add 85.98 shares, bringing the total to 335.98 shares projected to be worth $24,067 and generating $722/year at that point.
How the Numbers Are Calculated
This is a simplified, transparent model — worth understanding rather than trusting as a black box:
- Current yield = annual dividend per share ÷ current share price.
- Shares owned = total investment ÷ current share price.
- Each projected year, the per-share dividend and the share price both grow by the same assumed growth rate — this keeps the yield constant and is what "constant valuation multiple" means below.
- With DRIP on, each year's dividend cash buys additional shares at that year's projected price, and those new shares earn dividends starting the following year — this is the entire compounding mechanism.
- Yield on cost = the forward income run-rate ÷ your original investment, not the current share price.
The two year-N figures measure different things, which is worth knowing before you compare them. Income run-rate is forward-looking: the rate you'd be earning once the projection ends, at the grown dividend and the share count you've accumulated. Cumulative dividends looks backward: the sum of every payment actually made during the projected years, each at that year's lower rate. The run-rate is therefore higher than the final year's individual payment, by design.
The model compounds once per year rather than on each actual payment date, which understates compounding slightly for monthly or quarterly payers — a minor simplification, not a source of major error over multi-year horizons.
Assumptions This Calculator Makes
- Dividend growth is constant every year — no cuts, no suspensions, no special increases.
- The share price grows at the same rate as the dividend (constant valuation multiple), so current yield never drifts from today's figure in this model.
- No taxes are modeled on dividends received or reinvested.
- Compounding is annual, not matched to the payer's actual monthly, quarterly, or semi-annual schedule.
- No price appreciation is modeled beyond what the dividend-growth assumption implies.
What the Calculator Can't Tell You
It cannot tell you whether a given company's dividend is safe. A high current yield is often a symptom of a falling share price rather than a bargain — the market pricing in a dividend cut before it's announced. Check payout ratio, free cash flow coverage, and dividend history before assuming any yield is durable.
It also doesn't account for taxes. Qualified dividends are taxed at long-term capital gains rates, but non-qualified dividends and most REIT distributions are taxed as ordinary income — a meaningful drag in a taxable account that this calculator ignores entirely. And it assumes share price growth tracks dividend growth exactly, which real markets never do — multiples expand and contract independently of dividend policy.
If you're tracking dividends you actually hold — across multiple accounts, with real payment history instead of an assumed growth rate — the dividend portfolio tracker builds income projections from your own data, and the full feature set is covered on the dividend tracking page.
Frequently Asked Questions
How do you calculate dividend yield?
Dividend yield is the annual dividend per share divided by the current share price. A stock paying $1.20 per year at a $40 share price has a 3% yield. This calculator shows that figure as "Current Yield" — it's a snapshot based on today's price and the most recent dividend rate, not a forecast.
What is yield on cost and how is it different from current yield?
Yield on cost measures dividend income against what you originally paid, not the current price. If you bought at $40 and the dividend grows over time while your cost basis stays fixed, your yield on cost rises even if the stock's current yield (based on today's price) does not. This calculator projects yield on cost forward using your assumed dividend growth rate.
How does the DRIP (dividend reinvestment) calculation work?
With DRIP on, each year's dividend payment buys additional shares at that year's assumed share price instead of being paid out as cash. Those additional shares then earn dividends of their own the following year, which is what drives the compounding effect. Toggle DRIP off to see the cash-only comparison — same shares throughout, dividends paid out rather than reinvested.
Does this calculator account for dividend cuts or taxes?
No. It assumes the dividend grows at a constant rate every year, with no cuts, and it doesn't model any tax on the income received. Real dividend payers cut or suspend payouts, and reinvested or received dividends are usually taxable in the year you receive them unless the position is in a tax-advantaged account. Treat the output as a clean illustration of compounding, not a forecast of what a specific stock will do.
Why does the calculator assume the share price grows with the dividend?
To keep the model simple and internally consistent, it assumes the stock's valuation multiple stays constant — meaning the share price grows at the same rate as the dividend, so the yield you'd get buying fresh shares stays flat over the projection. In reality, share prices are driven by earnings, sentiment, and multiple expansion or contraction, not dividend policy, so actual price paths will differ from this assumption in both directions.