Project dividend income, DRIP compounding, and portfolio value growth for any dividend-paying stock or ETF. See your annual income, total dividends received, and yield on cost at any time horizon.
Your yield on cost grows to 21.85% by year 20 — versus your current yield of 4.00% today. Dividend growth and DRIP compounding are doing the work.
A dividend is a cash payment a company makes to shareholders — typically every quarter — out of its profits. When you own a dividend-paying stock or ETF, you receive these payments simply for holding shares. A Dividend Reinvestment Plan (DRIP) takes those cash payments and automatically uses them to buy more shares instead. More shares means more dividends next quarter. Those dividends buy more shares. The cycle repeats — this is dividend compounding.
The longer you hold, the more powerful this becomes. Yield on cost is the metric that shows it most clearly: it measures your annual dividend income as a percentage of your original investment. A stock bought at a 4% yield that grows its dividend at 7% per year doubles its yield on cost in roughly 10 years — meaning you are earning 8% annually on the same dollars you originally invested, regardless of what the stock price does.
Dividend Aristocrats — companies that have raised their dividend every year for 25+ consecutive years — have historically grown dividends at 6 to 8% annually. Combined with share price appreciation and DRIP reinvestment, long-term dividend investors often see their income stream grow faster than inflation every single year. This calculator models all three forces simultaneously: price growth, dividend growth, and reinvestment compounding.
This calculator models pre-tax returns. Qualified dividends are taxed at 0%, 15%, or 20% depending on your income — the same rates as long-term capital gains. Dividends inside a Roth IRA or 401(k) grow tax-free or tax-deferred.
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