Free Tool
DRIP Calculator
See how reinvesting dividends compounds your wealth over time. Enter your investment details and watch your shares and income grow year by year.
Year-by-Year Breakdown
| Year | Shares (Start) | Div/Share | Dividend Income | New Shares | Shares (End) | Portfolio Value |
|---|---|---|---|---|---|---|
| 1 | 200.0000 | $2.00 | $400.00 | 8.0000 | 208.0000 | $10,400.00 |
| 2 | 208.0000 | $2.10 | $436.80 | 8.7360 | 216.7360 | $10,836.80 |
| 3 | 216.7360 | $2.21 | $477.90 | 9.5581 | 226.2941 | $11,314.70 |
| 4 | 226.2941 | $2.32 | $523.93 | 10.4785 | 236.7726 | $11,838.63 |
| 5 | 236.7726 | $2.43 | $575.60 | 11.5119 | 248.2845 | $12,414.23 |
| 6 | 248.2845 | $2.55 | $633.76 | 12.6752 | 260.9598 | $13,047.99 |
| 7 | 260.9598 | $2.68 | $699.42 | 13.9884 | 274.9482 | $13,747.41 |
| 8 | 274.9482 | $2.81 | $773.76 | 15.4752 | 290.4234 | $14,521.17 |
| 9 | 290.4234 | $2.95 | $858.18 | 17.1635 | 307.5869 | $15,379.35 |
| 10 | 307.5869 | $3.10 | $954.34 | 19.0867 | 326.6737 | $16,333.68 |
How this calculator works
Enter your initial investment, current share price, annual dividend yield, and an optional dividend growth rate. The calculator assumes dividends are paid and reinvested once per year at the prevailing share price. Each year, the dividend per share grows by your specified growth rate, and all dividends are used to purchase fractional shares at the original share price. The year-by-year table shows exactly how your share count, dividend income, and total portfolio value evolve.
Why reinvesting dividends matters
Without reinvestment, your dividend income stays flat (or grows only with dividend raises). With DRIP, each dividend payment buys more shares, which produce more dividends the next period. This compounding effect is one of the most powerful forces in long-term investing. Studies have shown that reinvested dividends account for a significant portion of total stock market returns over multi-decade periods.
Understanding the results
- Final Portfolio Value — The total value of all accumulated shares at the end of the time period.
- Total Dividends Earned — The sum of every dividend payment received across the entire period, all of which was reinvested.
- Total Shares — Your original shares plus every fractional share purchased through reinvestment.
- Effective Yield on Cost— The final year's dividend income divided by your original investment. This shows how much your yield has grown through compounding and dividend increases.