Project your dividend income and portfolio value over time, with or without reinvesting dividends.
Dividends are cash payments companies make to shareholders, usually quarterly, out of their profits. A stock's dividend yield is the annual dividend divided by the share price — a $100 stock paying $3.50 a year yields 3.5%. This calculator projects both the income those dividends produce and how your portfolio grows over time, with the option to reinvest.
A dividend reinvestment plan (DRIP) automatically uses each dividend payment to buy more shares, which then pay their own dividends. This is compounding applied to income: over decades, reinvested dividends have historically accounted for a large share of the stock market's total return. Toggle reinvestment off to see how much slower a portfolio grows when you spend the dividends instead.
As companies raise their dividends and your share count grows, the income relative to what you originally invested climbs. A portfolio yielding 3.5% today can produce a far higher effective yield on your original cost a couple of decades later, which is why dividend-growth investing appeals to people building retirement income.
Tip: Chasing the highest yields can backfire — an unusually high yield often signals a falling share price or a dividend at risk of being cut. Steady, growing dividends usually beat sky-high ones.
Qualified dividends are taxed at lower long-term capital-gains rates, while ordinary dividends are taxed as regular income. Holding dividend stocks in a tax-advantaged account like an IRA lets the income compound without an annual tax drag.