Why Use a Dividend Calculator?
Investing in dividend-paying stocks is one of the most powerful strategies for building long-term wealth. Our Free Dividend Calculator helps you visualize the power of compound interest and Dividend Reinvestment Plans (DRIP).
What is DRIP?
DRIP stands for Dividend Reinvestment Plan. Instead of taking your dividend payments as cash, you automatically use them to buy more shares of the underlying stock. This calculator shows you exactly how reinvesting dividends can exponentially increase your portfolio value and share count over time.
Key Features of This Tool
- Share Accumulation Tracking: Unlike simple interest calculators, we track the actual number of shares you own, providing a realistic projection.
- Yield on Cost (YOC): See how your effective yield grows relative to your initial investment.
- Inflation & Growth: Account for both stock price appreciation and dividend growth rates.
Frequently Asked Questions (FAQ)
Yield on Cost is calculated by dividing the current annual dividend per share by your average cost basis per share. Our tool calculates this automatically.
Currently, this tool displays pre-tax returns to show the raw potential of your investment strategy. We recommend consulting a tax professional for net income calculations.