Dividend Yield Calculator
What's the yield on your dividend stock? Project income growth and model the power of dividend reinvestment (DRIP) compounding.
Try a scenario
How to Use This Calculator
Tab "Yield"
Enter the annual dividend per share and the current stock price to instantly see the dividend yield. Optionally add the number of shares you own to calculate your annual income, and your original purchase price to calculate yield on cost — the return relative to what you actually paid.
Tab "Income Projection"
Enter your total investment amount, current yield, expected annual dividend growth rate, and number of years. The calculator shows total dividends received over the period and how your yield on cost grows as the company raises its dividend each year.
Tab "DRIP (Reinvestment)"
Model what happens when you reinvest all dividends automatically. Enter your initial investment, share price, yield, price growth rate, dividend growth rate, and years. The result shows your projected portfolio value, annual income, and the "DRIP bonus" — the extra wealth generated purely by reinvesting dividends rather than spending them.
The Formulas
Yield = Annual Dividend per Share ÷ Current Stock Price × 100%
Yield on Cost:
Yield on Cost = Annual Dividend per Share ÷ Original Purchase Price × 100%
Annual Dividend Income:
Income = Annual Dividend per Share × Shares Owned
Income Projection (with dividend growth g):
Income(year n) = Initial Income × (1 + g)^(n − 1)
Total Dividends = ∑ Income(year 1) to Income(year N)
Yield on Cost(year N) = Income(year N) ÷ Original Investment × 100%
DRIP (annual compounding):
New Shares(year) = (Shares × Dividend per Share) ÷ Current Price
Shares(year+1) = Shares(year) + New Shares(year)
Price(year+1) = Price(year) × (1 + price growth rate)
Dividend per Share(year+1) = Dividend per Share(year) × (1 + dividend growth rate)
Portfolio Value = Final Shares × Final Price
All calculations use standard financial mathematics. No country-specific tax rates are applied. Results are pre-tax estimates.
Worked Examples
Example 1 — Basic Yield: $50 stock paying $2.00/year
An investor holds 500 shares of a stock trading at $50.00 that pays an annual dividend of $2.00 per share. They originally bought the shares at $40.00.
Calculation: Yield = $2.00 ÷ $50.00 × 100% = 4.0%. Annual income = $2.00 × 500 = $1,000/year. Yield on cost = $2.00 ÷ $40.00 × 100% = 5.0% — better than the headline yield because the shares were bought cheaper than today's price.
Example 2 — Income Projection: $10,000 at 4% yield, 5% dividend growth, 10 years
An investor puts $10,000 into a dividend stock with a 4% current yield. The company has historically grown its dividend by 5% per year. How does income evolve?
Calculation: Year 1 income = $400. Year 10 income = $400 × (1.05)^9 = $620. Over 10 years, total dividends sum to about $5,031. Yield on cost grows from 4% to 6.5% as the dividend increases while the original cost base stays fixed. This is why long-term dividend investors prize growing dividend payers over high-but-static yielders.
Example 3 — DRIP: $10,000 at 4% yield, 7% price growth, 5% dividend growth, 20 years
An investor starts a DRIP with $10,000 at $50/share (200 shares), reinvesting all dividends for 20 years. Stock price grows at 7%/year and dividends grow at 5%/year.
By reinvesting dividends, the investor accumulates far more shares than they started with. Each reinvestment buys new shares that themselves earn dividends — the compounding effect. The ~$13,300 DRIP bonus is the extra wealth created purely from reinvestment, with no additional cash invested. This is why DRIP is called "the snowball" — small additions compound into significant wealth over decades.
Understanding Dividend Investing: Key Concepts
What is Dividend Yield?
Dividend yield tells you the annual return you receive from a stock's dividends, expressed as a percentage of its current price. A stock at $100 paying $4/year has a 4% yield. It answers the question: "If I buy this stock today at the market price, what cash return do I get from dividends alone?"
Yield changes daily as the stock price moves. When the price rises, yield falls (you're paying more for the same dividend). When the price falls, yield rises — but a rising yield due to a falling price can be a warning sign rather than a bargain.
Yield on Cost vs Current Yield
Current yield is calculated on today's market price and is what new buyers receive. Yield on cost is personal — it measures the return on what you actually paid. Long-term investors in dividend-growth stocks often find their yield on cost far exceeds the current yield because the dividend has grown substantially since purchase. A stock bought at $20 ten years ago paying $2.00 now has a 10% yield on cost, even if today's yield (at $60/share) is only 3.3%.
The Power of Dividend Growth
A stock with a 2% yield growing dividends at 10%/year will surpass the income of a 5% yield stock with 0% dividend growth within approximately 10 years. This is why investors study dividend growth rate and dividend growth streaks alongside current yield. Companies with 10+ years of consecutive dividend increases are often called "dividend achievers" or "dividend aristocrats" (25+ years).
DRIP: The Compounding Snowball
A Dividend Reinvestment Plan automatically uses cash dividends to purchase additional shares. The compounding effect works on three levels simultaneously: (1) more shares generate more dividends, (2) higher dividends buy more shares, (3) rising prices increase portfolio value. Even a 4% yield reinvested consistently can dramatically accelerate wealth accumulation over 15–30 years compared to spending the dividends.
Yield Traps
A very high yield (often above 7–8%) can be a warning sign, not a gift. If a stock's price has fallen sharply due to business deterioration, the yield rises mathematically — but the company may soon cut the dividend. This is a yield trap. Always check: Is the payout ratio sustainable? Is free cash flow covering the dividend? Is the dividend growing or shrinking? A 3% yield from a growing company is often more valuable than an 8% yield from a declining one.
Frequently Asked Questions
Calculate for Your Country
For country-specific dividend and investment calculators that account for local tax rules, dividend allowances, and account types: