Dividend Calculator

1. Enter your number of shares and current price per share to set your starting position.
2. Enter the annual dividend per share — find this on the company's investor relations page or any stock data site. For a stock paying $0.50 quarterly, the annual dividend is $2.00.
3. Set dividend growth: most dividend stocks raise their payouts 4-8% per year. Dividend Aristocrats (S&P 500 companies with 25+ years of raises) average around 6%.
4. Set stock price growth: the S&P 500 has averaged ~10% annually with dividends, ~7% without. Use a conservative 5-8% for individual stocks.
5. Check "Reinvest dividends" if you have DRIP enabled — this dramatically increases your final value through compounding.

Dividend investing compounds two ways: rising share count from reinvestment, and rising payouts from dividend growth.

Period Dividend = Shares × (Annual Dividend / Periods per Year)
New Shares (DRIP) = Period Dividend / Current Share Price
Yield on Cost = Current Annual Dividend / Original Cost per Share
Final Value = (Original Shares + Reinvested Shares) × Final Price

Example: 100 shares at $50 paying $2/year (4% yield), with 5% annual dividend growth, 7% price growth, reinvested quarterly for 20 years grows to ~$30,500 portfolio value with ~$8,200 in cumulative dividends. The same scenario without reinvestment ends with ~$19,300 and the same dividend total.

The historical answer is nuanced. From 1926-2023, dividend-paying stocks in the S&P 500 returned ~9.6% annualized, slightly outperforming non-dividend payers at ~9.2%, with significantly lower volatility. But the wealth gap depends heavily on reinvestment.

Three rules from the data: dividend reinvestment accounts for ~40% of total long-term returns in the S&P 500. Dividend growth beats high starting yield over 15+ year horizons. And dividends paid in taxable accounts are taxed annually, which is why DRIP is most powerful inside IRAs and 401ks.