What is dividend yield?

Dividend yield is the annual dividend income expressed as a percentage of the current share price. For example, a stock paying $2/share annually at a price of $50/share has a 4% dividend yield. It shows how much income you get per dollar invested.

What is DRIP investing?

DRIP (Dividend Reinvestment Plan) means automatically using dividend payments to purchase more shares instead of taking the cash. Over time, compounding dramatically increases both share count and future dividend income. DRIP is especially powerful in tax-advantaged accounts.

What is the difference between qualified and ordinary dividends?

Qualified dividends meet IRS holding period requirements and are taxed at the lower long-term capital gains rates (0%, 15%, or 20%). Ordinary (non-qualified) dividends are taxed as regular income. Most dividends from US stocks held over 60 days are qualified.

What is yield on cost?

Yield on cost (YOC) compares your current annual dividend to your original purchase price, not the current market price. If you bought a stock at $50 and it now pays $4/share annually, your YOC is 8% even if the current yield is only 4% at today's $100 price.

Dividend Calculator

Calculate annual dividend income from stocks, ETFs, and REITs. Model DRIP reinvestment growth, yield on cost, and multi-stock portfolio income with tax analysis.

Investment Amount ?

Dividend Yield (%) ?

Payout Frequency ?

Annual Dividend Income

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Per Payment Amount —

Monthly Income Equivalent —

Extended More scenarios, charts & detailed breakdown ▾

Investment Amount

Dividend Yield (%)

Payout Frequency

Annual Dividend Income

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Per Payment —

Monthly Equivalent —

Professional Full parameters & maximum detail ▾

Stock 1 — Investment

Stock 1 — Yield (%)

Stock 2 — Investment

Stock 2 — Yield (%)

Stock 3 — Investment

Stock 3 — Yield (%)

Annual Dividend Growth Rate (%)

Qualified Dividend Tax Rate (%) ?

Ordinary Dividend Tax Rate (%) ?

Portfolio Income

Total Portfolio Annual Income —

Blended Portfolio Yield —

After-Tax Analysis

After-Tax Income (Qualified Rate) —

After-Tax Income (Ordinary Rate) —

Growth Projection

Projected Annual Income in 5 Years —

Projected Annual Income in 10 Years —

How to Use This Calculator

Enter your investment amount, dividend yield %, and payout frequency for instant income estimates.
Use the DRIP Growth tab to model reinvestment over time with a dividend growth rate.
Use the Yield on Cost tab to calculate how your effective yield has changed from your original cost basis.
Use the Professional tab for a 3-stock portfolio analysis with qualified vs ordinary tax rates and growth projections.

Formula

Annual Dividend Income = Investment × Dividend Yield
DRIP Future Value: Compounds yearly with reinvestment
Yield on Cost = Annual Dividend Income / Original Cost Basis

Example

Example: $10,000 invested at 4% yield = $400/year ($100/quarter). With 5% annual dividend growth reinvested over 20 years, portfolio grows to approximately $27,000+.

Frequently Asked Questions

Dividend yield is the annual dividend income expressed as a percentage of the current share price. For example, a stock paying $2/share annually at a price of $50/share has a 4% dividend yield. It shows how much income you get per dollar invested.
DRIP (Dividend Reinvestment Plan) means automatically using dividend payments to purchase more shares instead of taking the cash. Over time, compounding dramatically increases both share count and future dividend income. DRIP is especially powerful in tax-advantaged accounts.
Qualified dividends meet IRS holding period requirements and are taxed at the lower long-term capital gains rates (0%, 15%, or 20%). Ordinary (non-qualified) dividends are taxed as regular income. Most dividends from US stocks held over 60 days are qualified.
Yield on cost (YOC) compares your current annual dividend to your original purchase price, not the current market price. If you bought a stock at $50 and it now pays $4/share annually, your YOC is 8% even if the current yield is only 4% at today's $100 price.

Related Calculators

Sources & References (5) ▾

SEC — Investor Bulletin: Dividends — U.S. Securities and Exchange Commission
IRS — Publication 550: Dividends and Distributions — Internal Revenue Service
FINRA — Dividends and Dividend Reinvestment Plans — Financial Industry Regulatory Authority
IRS — Topic 404: Dividends — Internal Revenue Service
Federal Reserve — Corporate Dividend Data — Federal Reserve