Dividend Calculator
Calculate the income and yield from a dividend-paying holding, and project how the income and yield-on-cost grow over time as the dividend increases.
How to use this calculator
- 1Enter the number of shares you hold and the current share price.
- 2Enter the annual dividend paid per share.
- 3Optionally set an annual dividend growth rate and a number of years to project.
- 4Read the current income and yield, and how they grow over time.
How it works
Dividend income and yield
annual income = shares × dividend per share dividend yield = dividend per share ÷ price future dividend = current × (1 + growth)^years yield on cost = future dividend per share ÷ original price
A dividend is a share of a company's profit paid out to shareholders, usually quarterly. The income from a holding is simply the number of shares times the annual dividend per share. The dividend yield expresses that income as a percentage of the share price, which lets you compare the income return of different investments regardless of price. Because the yield uses the current price, it moves inversely with the price: a stock whose price rises will show a falling yield even though the cash dividend is unchanged. Long-term investors therefore watch yield on cost — the dividend measured against the price they originally paid — which climbs over the years as a company raises its dividend, and can far exceed the yield a new buyer sees.
Worked example
200 shares at $50 paying $2 per share yields 4% and produces $400 a year, or $100 a quarter. If the dividend grows 5% a year, after a decade it reaches about $3.26 a share — $652 of annual income, a yield on cost of 6.5% against the original $50 price, even as new buyers still see roughly 4%.
Dividend Calculator: the complete guide
Yield, income, and why they move apart
The two headline numbers of a dividend holding — the dollar income and the percentage yield — can move in opposite directions, which confuses many new investors. The income is fixed by the dividend the company declares: 200 shares paying $2 each produce $400 regardless of what the market does. The yield, though, divides that dividend by the current share price, so when the price rises the yield falls, and when the price drops the yield rises, even though the actual cash you receive has not changed at all.
This inverse relationship has a useful signal buried in it. A sharply rising yield often means the price has fallen, which can flag either a bargain or a company in trouble whose dividend is at risk of being cut. A very high yield in particular deserves scrutiny rather than excitement, because the market may be pricing in an expected cut. Reading yield and income together, rather than chasing the highest yield number, is the first discipline of income investing.
The power of dividend growth and yield on cost
The most compelling case for dividend investing is not the starting yield but its growth. Many established companies raise their dividend year after year, and a modest starting yield that grows steadily becomes a large one relative to your original investment. This is captured by yield on cost: the current dividend divided by the price you actually paid. A stock bought at a 3% yield that grows its dividend 7% a year will, in a decade, pay roughly 6% on your original cost, and far more over a lifetime of holding.
This is why long-term dividend-growth investors are relatively indifferent to the yield a new buyer sees. Their income keeps climbing on a fixed cost base, often outpacing inflation, which makes a portfolio of dividend-growers a powerful source of rising retirement income. The trade-off is patience: yield on cost only compounds for those who hold through the years, and it rewards choosing companies with a durable ability to keep raising the payout, not just a high yield today.
Reinvestment and the compounding engine
This calculator shows dividends as income taken in cash, but the most powerful thing you can do with dividends, if you do not need the income yet, is reinvest them. Using each payment to buy more shares means the next dividend is paid on a larger holding, which buys still more shares — the classic compounding loop. Over long periods, reinvested dividends have historically accounted for a striking share of the total return of the stock market, often rivalling or exceeding price appreciation.
Reinvestment compounds on two fronts at once when the dividend is also growing: more shares each year, each paying a rising dividend. The effect is exponential rather than linear, and it is why dividend reinvestment plans are a cornerstone of patient wealth building. The decision of whether to reinvest or take the cash is ultimately about whether you need the income now. In the accumulation years, reinvesting turns a steady income stream into a growth engine; in retirement, the same stream becomes the spendable income it was always building toward.
Frequently asked questions
How do I calculate dividend income?
Multiply the number of shares you own by the annual dividend per share. 200 shares paying $2 each produce $400 a year. Divide by four for the typical quarterly payment. The dividend yield is that per-share dividend divided by the share price.
What is dividend yield?
Dividend yield is the annual dividend per share divided by the share price, expressed as a percentage. A $2 dividend on a $50 share is a 4% yield. Because it uses the current price, the yield falls as the price rises even when the cash dividend is unchanged.
What is yield on cost?
Yield on cost is the current dividend measured against the price you originally paid, not today's price. As a company raises its dividend over the years, your yield on cost climbs well above what new buyers see — the core appeal of long-term dividend-growth investing.
Should I reinvest dividends?
If you don't need the income yet, reinvesting is powerful. Using each dividend to buy more shares means the next payment is larger, compounding your holding and income over time. Reinvested dividends have historically driven a large share of the stock market's total return.