How It Works
Each year, the position pays a dividend based on the current dividend-per-share amount and your share count. If you choose to reinvest, that cash buys more shares at the current price; either way, the dividend-per-share and the share price then grow by the rates you set for the next year.
This compounds two effects when reinvesting: more shares each year, and (if you set dividend growth) a larger dividend per share — which is why reinvested dividend growth tends to accelerate over long periods.
Formula
- DivPerShare — Starts at Price × Yield, grows at rate d each year
- g — Assumed annual share-price growth rate
- d — Assumed annual dividend growth rate
Example
Example inputs: 100 shares at $50, 3% yield, 5% dividend growth, 6% price growth, 15 years, dividends reinvested.
Result: Total dividends received: $4,077 (before reinvestment effects). Final portfolio value: $18,158.05 from a $5,000 initial investment.
Frequently Asked Questions
Why does reinvesting matter so much?
Reinvested dividends buy additional shares, which then earn their own dividends and price growth — a compounding effect. Over long horizons this can meaningfully outpace taking dividends as cash.
Is dividend yield the same as total return?
No. Yield only measures dividend income relative to price; total return also includes share-price gains or losses. This calculator projects both together.
Can I model a real stock's exact history with this?
Not precisely — real dividend cuts, raises, and price moves are uneven. Use recent averages as a starting assumption, and treat the output as one projection, not a forecast.
This calculator provides estimates for informational purposes only and should not be considered financial, tax, or legal advice.