Project your dividend income over time with optional dividend reinvestment (DRIP). Factor in dividend growth rates and monthly contributions to see how your passive income and portfolio value grow year by year.
Dividends are the portion of a company's profits that gets distributed to shareholders, typically paid quarterly in cash. A stock with a $50 share price and an annual dividend of $1.75 has a 3.5% dividend yield — for every $1,000 invested, you receive $35 per year in cash. Across a portfolio of dividend-paying stocks, the income stream is reasonably predictable and historically grows over time.
Two dynamics make dividend investing more powerful than the headline yield suggests. First, established dividend-paying companies tend to increase their dividends each year — often by 5–8% for "dividend growers" and 2–3% for slower payers. Your income per share rises while you hold. Second, if you reinvest dividends (called a DRIP — Dividend Reinvestment Plan), each payment buys more shares, which produce more dividends in the next quarter, which buy more shares. The compounding effect rivals capital appreciation over long horizons.
This calculator projects your portfolio value, annual income, and total dividends received under your chosen yield, growth rate, time horizon, and optional ongoing contributions. The reinvestment toggle lets you compare the two paths side by side: taking the cash now vs. compounding the income for future use.
Initial: $25,000. Yield: 3.5%. Growth: 6%. Contributing $500/mo. DRIP on. Year 5: Portfolio ≈ $70,000, annual dividend ≈ $2,800 Year 15: Portfolio ≈ $250,000, annual dividend ≈ $11,000 Year 25: Portfolio ≈ $660,000, annual dividend ≈ $32,000 Yield on cost at year 25: ≈ 12% (against original $25K + contributions). The compounding of dividend growth and reinvestment dwarfs the initial yield.
Existing portfolio: $750,000. Yield: 4%. Growth: 4% (mature retirement allocation). No new contributions. Take dividends as cash. Year 1 income: $30,000 Year 10 income: ≈ $44,400 (4% growth compounded) Year 20 income: ≈ $65,700 The portfolio value stays roughly flat (income paid out, no reinvestment) but the income stream grows enough to roughly keep up with inflation. This is the "dividend ladder" approach to retirement income.
Initial: $100,000. Yield: 8%. Growth: 0% (frozen dividend). 20 years, no DRIP. Annual income year 1: $8,000 Annual income year 20: $8,000 (no growth) Inflation-adjusted purchasing power at year 20 (3% inflation): $4,430. High yield with no growth is the classic dividend trap — companies that maintain a high payout often do so because the business cannot reinvest profitably, and inflation gradually destroys the real income. Always check that dividend growth at least matches inflation.
Use this calculator when planning a dividend-focused investment strategy, projecting passive income for retirement, or evaluating individual dividend stocks against their long-term income potential. It is most valuable for comparing "current yield" stocks (high yield, low growth) against "dividend growth" stocks (lower yield, higher growth) — over a 20+ year horizon, the higher-growth option usually wins.
For early-career investors building wealth, the dividend yield itself matters less than what the portfolio compounds to. A 3.5% yielder growing dividends 6% per year overtakes a 6% yielder with 0% growth in roughly 12 years. Total return — capital appreciation plus reinvested dividends — is what matters most before retirement; income only becomes the primary metric once you stop adding money.
Pair this calculator with the dividend-yield calculator (single-stock yield analysis), the compound-interest calculator (for the math of reinvested returns), and the retirement-savings calculator (to see how the dividend stream fits into overall retirement income).
A note on taxes: dividends in taxable accounts are taxed annually — qualified dividends at long-term capital gains rates (0%, 15%, or 20% depending on income), ordinary (non-qualified) dividends at marginal income rates. This drag reduces the after-tax compounding rate. Tax-advantaged accounts (Roth IRA, Traditional IRA, 401(k)) shield dividends from annual tax, which is why dividend-focused strategies work especially well inside them.
Calculate dividend yield from stock price and dividend payments.
See how your money grows over time with compound interest and regular contributions.
Calculate profit or loss from buying and selling stocks.
Calculate current yield and yield to maturity for bonds.
Calculate the Weighted Average Cost of Capital for a company.
Calculate the internal rate of return for a series of cash flows.
Annual Dividend Income
$32,596
Monthly Dividend Income
$2,716
Total Dividends Earned
$231,147
Portfolio Value
$401,147
| Year | Annual Dividend | Portfolio Value | Yield on Cost (%) |
|---|---|---|---|
| 1 | $1,960.00 | $57,960.00 | 3.50% |
| 2 | $2,350.53 | $66,310.53 | 3.79% |
| 3 | $2,790.28 | $75,100.81 | 4.10% |
| 4 | $3,285.95 | $84,386.76 | 4.44% |
| 5 | $3,845.30 | $94,232.06 | 4.81% |
| 6 | $4,477.35 | $104,709.41 | 5.21% |
| 7 | $5,192.64 | $115,902.06 | 5.64% |
| 8 | $6,003.50 | $127,905.55 | 6.13% |
| 9 | $6,924.38 | $140,829.93 | 6.66% |
| 10 | $7,972.35 | $154,802.28 | 7.25% |
| 11 | $9,167.55 | $169,969.83 | 7.90% |
| 12 | $10,533.88 | $186,503.72 | 8.63% |