Dividend Reinvestment (DRIP) Calculator
See how reinvesting dividends compounds your share count and portfolio value compared with taking the cash.
A dividend reinvestment plan uses each dividend to buy more shares. Those shares pay dividends of their own.
Over long periods reinvested dividends have provided a large share of total stock market returns.
How it works
Each year the dividends buy more shares at the current price. The price and the dividend per share both grow at the rates you set.
The cash line keeps the original shares and pockets the dividends without reinvesting them.
The formula
Dividends received = shares owned x dividend per share.
Tips
- Most brokers offer free automatic reinvestment. Turn it on.
- Dividends are taxable in a normal account even when reinvested. Use an IRA where you can.
Frequently asked questions
What is a good dividend yield?
The S&P 500 yields around 1% to 2%. Very high yields can signal a company in trouble.
Does reinvesting always win?
Over long periods, almost always. It only loses if the share price collapses and never recovers.
This is not financial advice. Nothing on this site is investment, tax, legal or financial advice of any kind.
The calculators give simplified estimates from the numbers you enter. They ignore taxes, fees, rate changes and real market returns, and they can be wrong.
Do not make financial decisions based on these results. Speak to a licensed financial adviser, accountant or lender before acting, and read the full disclaimer.