Dividend Calculator
Yield plus price growth, reinvested — the quiet engine of long-term returns.
How this is calculated
Total return is price growth plus dividend yield, compounded monthly with any top-ups — the standard way to model a dividend-reinvestment plan.
Worked example: $10,000 at 4% yield and 5% growth for 20 years → roughly $40,000 with dividends reinvested. Take the dividends as cash instead and the ending value is markedly lower.
Yield is a ratio, and both halves move
Dividend yield is annual dividend divided by share price, which means a yield can rise for two opposite reasons: the company raised its dividend, or the share price fell. A yield that suddenly looks generous is very often the second, and the market may be pricing in a cut that has not been announced yet. Any yield well above its sector's norm is a question rather than a bargain.
Cover and payout ratio tell you whether it lasts
The payout ratio is the share of earnings paid out; dividend cover is its inverse. A payout above 100% means the company is paying more than it earned, funded from reserves or borrowing, which is sustainable briefly and not indefinitely. Cash flow matters more than earnings here, since dividends are paid in cash and earnings can be accrual-heavy. A long record of increases — the dividend-aristocrat pattern — is meaningful precisely because cutting one is a public admission that management resists.
The dates that decide who gets paid
The ex-dividend date is the one that matters: buy on or after it and the seller keeps the dividend. The share price typically drops by roughly the dividend amount on that morning, which is why buying just before it is not free money. The record date confirms the holders, and the payment date is when cash arrives, often weeks later.
Reinvestment, tax and the total-return picture
Reinvesting dividends is the mechanism behind most long-run equity returns: over multi-decade periods, reinvested income has historically contributed a majority of total return, and price appreciation alone substantially understates what equities delivered. Tax treatment varies widely and changes the arithmetic — withholding taxes on foreign dividends, differing domestic rates, and tax-sheltered accounts all change what actually compounds. Model gross here, then apply your own rate.
Frequently asked questions
What does “reinvested” assume?
That every dividend buys more shares rather than being spent — a DRIP. The projection compounds your total return (price growth plus dividend yield), which is why reinvesting beats taking the cash if you don’t need the income yet.
Are dividends guaranteed?
No. Companies can cut or suspend dividends, and yields move with the share price. Treat the yield you enter as an assumption, and remember this ignores tax on dividends, which varies by account and country.