Dividend Calculator
Project your dividend income, yield, and yield on cost over time
Enter Stock & Dividend Data
$
Current market price per share
$
Total dividends paid per share per year
How many shares you hold
%
Expected annual dividend growth (e.g. 5 for 5%)
yrs
Years to project (1–50)
This calculator projects dividend income using three formulas. Current yield = (Annual dividend per share ÷ Share price) × 100. Annual income = Annual dividend per share × Number of shares. Dividend in year N = Initial dividend × (1 + growth rate)^N. Yield on cost = (Dividend in year N ÷ Original share price) × 100.
Yield = (Annual Div ÷ Price) × 100
步骤1： Enter the current share price and the annual dividend per share. For quarterly dividends, multiply by 4.
步骤2： Enter the number of shares you hold and the expected annual dividend growth rate. Dividend aristocrats typically grow at 5–8%.
步骤3： Set the projection period (1–50 years) and click Calculate. The table shows income at key milestones.
步骤4： Note the yield on cost — this shows how powerful dividend growth becomes relative to your purchase price over time.
What Is Dividend Yield and Why Does It Matter?
Dividend yield is the annual dividend income a stock pays relative to its current market price, expressed as a percentage. It is the foundational metric for income investors — it tells you how much cash return you receive per dollar invested, independent of any price appreciation. A stock trading at $50 with a $2 annual dividend pays a 4% yield.
Yield alone does not tell the full story. A 10% yield on a company with declining earnings is a warning sign — often called a yield trap. A 2% yield growing at 10% annually will surpass a static 6% yield within eight years on a yield-on-cost basis, while also appreciating in price. Quality of the dividend — supported by free cash flow, a sustainable payout ratio, and a growing business — matters more than the headline number.
Yield on Cost: The Most Underrated Dividend Metric
Yield on cost (YOC) measures your dividend income relative to the original price you paid — not the current market price. It reveals the true power of dividend growth investing over time. If you bought Johnson & Johnson at $60 per share 20 years ago and it now pays $4.84 per share annually, your yield on cost is over 8% — even if today's buyers only receive a 2.7% yield.
This is why long-term dividend investors focus on dividend growth rate rather than starting yield. A company that grows its dividend at 8% per year doubles the payout roughly every 9 years (the Rule of 72). Over a 30-year holding period, a modest starting yield of 2% at 8% growth becomes an effective yield on cost of over 20%. This calculator shows you exactly how that progression unfolds for any stock you input.
Dividend Aristocrats and Sustainable Payout Ratios
Dividend Aristocrats are S&P 500 companies that have raised their dividend for at least 25 consecutive years. This includes names like Coca-Cola (62+ years), Procter & Gamble (67+ years), and Johnson & Johnson. The discipline required to maintain this record acts as a quality filter — companies that consistently grow dividends tend to have durable competitive advantages, disciplined capital allocation, and strong free cash flow generation.
The payout ratio — dividends paid divided by net income — tells you how much of earnings are returned as dividends. A ratio below 60% for most industries suggests the dividend is sustainable with room to grow. REITs and utilities can sustain higher ratios (70–90%) due to their stable, regulated cash flows. A payout ratio above 100% means the company is paying out more than it earns — unsustainable without earnings growth or asset sales.
Using the Dividend Calculator Alongside Other Tools
The dividend calculator works best as part of a broader valuation workflow. Before buying a dividend stock, verify the price is reasonable using our Graham Number calculator and confirm the margin of safety with our Margin of Safety calculator. An attractive dividend yield on an overvalued stock may still deliver poor total returns if the price mean-reverts.
For DRIP (Dividend Reinvestment Plan) projections — where dividends are automatically reinvested to buy more shares — use our Compound Interest Calculator to model the compounding effect. Also check our Portfolio Rebalancing Calculator to keep your dividend portfolio aligned with your target allocation as individual positions grow.
Frequently Asked Questions
Dividend yield = (Annual dividend per share ÷ Current share price) × 100. A stock paying $2 per share trading at $40 has a 5% yield. This calculator computes yield automatically from your inputs.
Yield on cost is the dividend yield based on your original purchase price, not the current market price. If you bought a stock at $20 and it now pays $2 per share annually, your yield on cost is 10% — regardless of where the stock trades today. Yield on cost grows every time the company raises its dividend.
Dividend aristocrats — companies that have raised dividends for 25+ consecutive years — typically grow dividends at 5–10% annually. A sustainable growth rate is one supported by underlying earnings growth, not payout ratio expansion. Rates above 15% are rarely sustainable for more than a few years.
DRIP (Dividend Reinvestment Plan) automatically reinvests dividends into additional shares rather than paying them as cash. Over time, this compounds your share count and amplifies income growth significantly. This calculator models straightforward dividend income without reinvestment. Use the Compound Interest Calculator for DRIP projections.
For a deeper dive into dividend investing strategy, read our article: Investor Psychology: How Emotions Destroy Returns
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