DRIP stands for Dividend Reinvestment Plan. Instead of receiving dividends as cash, the dividends are used to automatically purchase more shares (including fractional shares) of the same stock, compounding your holdings over time.

Does this account for taxes on dividends?

This calculator models pre-tax reinvestment for simplicity. In taxable accounts you would owe income or qualified dividend tax each year, which reduces the cash available to reinvest. In tax-advantaged accounts (IRA, 401k) dividends can be reinvested in full.

What is a realistic dividend yield?

Broad market dividend yields typically range from 1.5% to 3%. High-yield stocks and REITs often pay 4–7%. Yields above 8% can signal elevated risk — always check payout ratio and earnings coverage before assuming a high yield is sustainable.

What stock price growth rate should I use?

The long-run US stock market has averaged roughly 7–10% annual price appreciation. For conservative planning, 5–7% is a common assumption. For individual stocks, consider historical CAGR and analyst consensus estimates.

Can dividend yield really stay constant every year?

Dividend yield = dividend per share / share price. If both grow proportionally, the yield stays roughly constant. This calculator uses constant yield as a simplifying assumption; real-world yields fluctuate with price movements and payout changes.

How is the year-end share price calculated?

Each year's share price = previous year's price × (1 + annual price growth rate). Dividends are based on that year's opening share price × yield, then used to buy more shares at the average price for the year.

Dividend Reinvestment Calculator (DRIP)

Name: Dividend Reinvestment Calculator (DRIP)
Availability: InStock
Author: Nham Vu

Enter your stock price, shares, dividend yield, and holding period to see how reinvesting dividends compounds your portfolio year by year.

Investment Settings

Initial Share Price ($)

Number of Shares

Annual Dividend Yield (%)

Annual Price Appreciation (%)

Annual Dividend Growth (%)

Investment Period (Years)

Final Value

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Total Invested

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Total Dividends

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Final Shares

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DRIP vs. No Reinvestment

With DRIP

Without DRIP

Year-by-Year Breakdown

Year	Share Price	Shares	Dividends Paid	Shares Added	Portfolio Value

Enter your investment details

Fill in the settings on the left and click Calculate.

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Summary

Enter your stock price, shares, dividend yield, and holding period to see how reinvesting dividends compounds your portfolio year by year.

How it works

Enter your initial share price and the number of shares you own.
Input the annual dividend yield (%) paid by the stock.
Set the expected annual stock price appreciation rate (%).
Optionally specify an annual dividend growth rate (%).
Choose how many years to model the investment.
The calculator reinvests each year's dividend to buy fractional shares, then compounds the next year.

Use cases

Model long-term wealth building with dividend stocks like dividend aristocrats.
Compare DRIP vs. taking dividends as cash to understand the compounding premium.
Estimate retirement portfolio value when holding dividend ETFs for 20-30 years.
Evaluate how dividend growth rate affects total returns over time.
Plan how many shares to accumulate before dividends cover living expenses.
Understand the impact of starting earlier vs. later on final portfolio value.
Screen dividend stocks by projected total return including reinvested income.
Illustrate the snowball effect of compounding to new investors.

Frequently Asked Questions

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Last updated: 2026-05-23 · Reviewed by Nham Vu