Dividend Income Calculator
Income and portfolio growth from dividends over time, with and without reinvestment, plus the yield on your original cost.
Annual dividend income by year
Yield on cost rises over time because the dividend grows against the price you originally paid, even though the current yield stays near 4.0%. That divergence is the argument for dividend growth investing. Dividends are not guaranteed and can be cut at any time.
This projects three things that compound together: the share count grows if dividends are reinvested, the dividend per share grows if the company raises it, and the share price grows. The interaction is why long-held dividend positions can produce income far above their original yield.
Frequently asked questions
What is the difference between yield and yield on cost?
Current yield is the annual dividend divided by today’s price, which is what a new buyer receives. Yield on cost divides the same dividend by what you paid, so it rises over time for any company that increases its payout.
Should I reinvest dividends?
Reinvesting compounds the share count and produces a materially larger balance over long periods, which this calculator shows directly. Taking cash makes sense when you need the income or want to direct it elsewhere in the portfolio.
Are dividends guaranteed?
No. Dividends are declared quarterly at the board’s discretion and can be cut or suspended at any time, which typically happens exactly when the business is under stress. A high yield often signals that the market expects a cut.
How are dividends taxed?
Qualified dividends are taxed at long-term capital gains rates in a taxable account, and ordinary dividends at your income rate. In a tax-advantaged account there is no annual tax drag, which is why dividend strategies are often held there.
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Calculators model hypothetical outcomes from the inputs you provide. They are informational only, not financial, investment, tax, or legal advice.