Dividend reinvestment

Dividend Reinvestment Calculator (DRIP)

This dividend reinvestment (DRIP) calculator shows how much reinvesting dividends adds compared with taking them as cash. Enter a starting investment, dividend, growth assumptions and optional monthly or yearly contributions, or load a stock or ETF such as SCHD or JEPI to fill its price and dividend. Growth rates are your assumptions, not forecasts.

Free calculator

Model a dividend reinvestment scenario

Position
Dividend

$2.00 a year at this frequency.

Growth and time
%
%
yrs
Regular contributionsNone
After 20 years
Reinvesting adds $17,221

$52,604 reinvesting vs $35,383 taking dividends as cash.

Figures below for
Shares held
480.16
From 200 at the start.
Final-year income
$2,399
$22,630 in dividends overall.
Total return
426.04%
On everything put in.
Yield on cost
23.99%
Final-year income / money put in. Reinvested dividends are not cost.
Value over time: reinvesting vs taking cash

Taking cash counts every dividend collected, held uninvested. The gap between the lines is what reinvesting adds.

  • Reinvesting
  • Taking cash
YearPriceDiv / shareContributedShares (DRIP)Shares (cash)IncomeDRIP valueCash value
1$52.00$2.04$0208.15200$414$10,824$10,807
2$54.08$2.14$0216.72200$452$11,720$11,651
3$56.24$2.25$0225.72200$494$12,695$12,533
4$58.49$2.36$0235.19200$541$13,757$13,455
5$60.83$2.48$0245.16200$592$14,913$14,418
6$63.27$2.60$0255.64200$648$16,174$15,424
7$65.80$2.73$0266.69200$709$17,547$16,477
8$68.43$2.87$0278.32200$777$19,045$17,576
9$71.17$3.01$0290.58200$852$20,679$18,726
10$74.01$3.16$0303.5200$934$22,463$19,927
11$76.97$3.32$0317.14200$1,024$24,411$21,183
12$80.05$3.48$0331.52200$1,124$26,539$22,495
13$83.25$3.66$0346.7200$1,234$28,864$23,867
14$86.58$3.84$0362.73200$1,355$31,407$25,302
15$90.05$4.03$0379.67200$1,489$34,188$26,801
16$93.65$4.24$0397.57200$1,636$37,232$28,368
17$97.40$4.45$0416.5200$1,799$40,565$30,007
18$101.29$4.67$0436.53200$1,980$44,216$31,720
19$105.34$4.90$0457.72200$2,179$48,217$33,511
20$109.56$5.15$0480.16200$2,399$52,604$35,383

How to use the DRIP Calculator

  1. Load a stock or ETF to fill its price, dividend and payment frequency, or enter your own.
  2. Choose a starting investment or share count, and any regular contributions.
  3. Set dividend growth, price growth and a horizon, then compare reinvesting with taking cash.

How the calculation works

The calculator runs two paths from the same assumptions. On each payment date the reinvesting path uses the dividend to buy more shares at the scenario price; the cash path keeps the same shares and collects the dividend. The DRIP advantage is the difference in what each ends with.

Formula

Dividend received = shares owned x dividend per share per payment

New shares (reinvesting) = dividend received / scenario share price

Cash path value = shares x final price + every dividend collected

DRIP advantage = reinvesting value - cash path value

Input definitions

Initial investment
Cash amount used to estimate the starting share count.
Starting shares
Known shares owned today, if you prefer not to use an investment amount.
Dividend per share per payment
The cash dividend paid for each share on each payment date.
Dividend growth
Annual scenario assumption for how the dividend changes over time.
Price growth
Annual scenario assumption for the share price used when reinvesting.

Worked example

$10,000 at a $50 share price buys 200 shares. With a $0.50 quarterly dividend growing 5% a year and a share price growing 4% a year, reinvesting for 20 years ends at about 480 shares worth $52,600, paying about $2,400 in the final year.

Taking the dividends as cash leaves 200 shares plus the dividends collected, about $35,400 in total, with final-year income near $1,030. The DRIP advantage is roughly $17,200.

What the results mean

  • The DRIP advantage measures compounding alone: the cash path is credited with every dividend it collected.
  • Reinvesting helps most over long horizons, with higher yields and growing dividends, and when prices are flat or rising.

Assumptions and limitations

  • Dividend and price growth are steady rates you choose, not forecasts.
  • Dividends are reinvested at the scenario price on each payment date, in fractional shares.
  • Monthly contributions buy shares at the start of each month and annual contributions at the start of each year, so new money collects only the dividends paid after it is invested.
  • Taxes, fees and plan discounts are not modeled; taxable accounts owe tax on reinvested dividends too.
  • Income on money put in divides final-year income by the starting investment plus contributions. Reinvested dividends are not counted as cost, so it differs from a brokerage yield on cost that includes reinvested cost basis.
  • Cash dividends are held uninvested, earning nothing.

DRIP Calculator FAQ

What does a dividend reinvestment (DRIP) calculator do?

A dividend reinvestment calculator models how reinvesting dividends may change future shares, dividend income, cumulative dividends and ending value compared with taking the same dividends as cash, based on the assumptions you enter.

Are these DRIP results a forecast?

No. The calculator output is a scenario based on your inputs for dividends, dividend growth, price growth, payment frequency, and time horizon. It is not an AlgovestIQ forecast or investment recommendation.

Should dividend per share be annual or per payment?

Either. Choose Per payment or Per year above the dividend field. For a quarterly stock paying $1.00 a year, enter $0.25 per payment or $1.00 per year with quarterly frequency; the calculator converts once and uses the same per-payment dividend either way.

How is the DRIP advantage calculated?

Both paths start with the same shares and contributions. The reinvesting path uses every dividend to buy more shares; the cash path keeps the same shares and adds each dividend to an uninvested cash pile. The DRIP advantage is the reinvesting path's ending value minus the cash path's shares plus all dividends collected.

Can reinvesting dividends ever come out behind?

Yes. If the share price falls over the period, dividends reinvested at higher earlier prices end up worth less than the same dividends held as cash, so the DRIP advantage turns negative. With a flat or rising price, reinvesting comes out ahead.