CompoundInterestCalc Dividend yield
Income from investments

Calculators for dividend income

Two tools for the income investor — turn a share price and payout into a real income stream, then see how reinvesting those dividends compounds the position over time. Free and private to your browser.

2 calculators Income & DRIP 100% private

Measure & compound income

Dividend Yield

income

From share price and payout to a real income stream — projected year by year with dividend growth and reinvestment.

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Dividend Reinvestment

DRIP

Reinvest or take the cash? Both paths on one chart, with dividend growth, price growth and the compounding gap between them.

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Where to start

From yield to compounding income

Two steps: measure the income a holding produces, then decide whether to spend it or let it compound.

Step 1

Measure the yield

Start with the basics — turn a share price and annual payout into a yield and a projected income stream, growing year by year as the dividend rises.

Dividend Yield
Step 2

Reinvest to compound

The big decision for income investors: take the cash, or reinvest it. See both paths on one chart and the compounding gap that opens up between them.

Dividend Reinvestment
The fundamentals

How dividend investing works

A dividend is a share of a company's profit paid out to shareholders, usually every quarter. The yield — the annual payout divided by the share price — tells you the income rate, much like interest on a deposit, though unlike interest a dividend can be cut or raised.

The quiet engine of dividend investing is reinvestment. Automatically buying more shares with each payout means next quarter's dividend is paid on a slightly larger holding, and over decades that compounding can dwarf the dividends themselves.

Dividend yield

Annual dividend per share divided by the share price. It's the income rate on your investment — a $4 payout on a $100 share is a 4% yield.

Payout ratio

The share of earnings paid out as dividends. A very high ratio can signal a payout that's hard to sustain; a moderate one leaves room for growth and cushions against cuts.

Dividend growth

Many companies raise their dividend over time. A modest starting yield that grows steadily can outpace a higher static yield within a decade or two.

Reinvestment (DRIP)

Automatically using each dividend to buy more shares. It compounds your income — each payout buys shares that themselves pay dividends next time.

Yield on cost

Your current dividend measured against what you originally paid, not today's price. For long-held, growing dividends it can climb well above the headline yield.

Total return

Dividends plus price change. Focusing only on yield ignores half the picture — a high yield means little if the share price is sliding.

Questions

Frequently asked

What is a good dividend yield?
There's no single answer — it depends on the sector and the risk. Very high yields (well into double digits) often signal a troubled company or an unsustainable payout, while steady, growing dividends at a moderate yield are usually healthier. The dividend yield calculator projects the income either way.
Should I reinvest dividends or take the cash?
If you don't need the income yet, reinvesting compounds your position — each payout buys more shares that pay their own dividends. If you're living off the portfolio, taking the cash makes sense. The DRIP calculator shows both paths side by side.
What's the difference between yield and yield on cost?
Yield uses today's share price; yield on cost uses what you originally paid. If you bought years ago and the dividend has grown, your yield on cost can be far higher than the current yield a new buyer would get.
Are dividends guaranteed?
No. Unlike bond interest, dividends are paid at the company's discretion and can be cut or suspended, especially in downturns. That's why the payout ratio and the company's stability matter as much as the headline yield.
Why look at total return, not just yield?
Because price matters too. A stock with a high yield but a falling price can lose you money overall, while a lower-yield stock that appreciates can do better. Total return combines both into the number that actually counts.