Dividend Yield Calculator
Calculate your dividend income, yield on cost, and see how reinvesting dividends compounds your returns over time.
4.00%
$200
$50
$1,121
With DRIP enabled, dividends buy additional shares each period, accelerating portfolio growth.
Yield on cost shows what you earn relative to your original purchase price — not today's price. A 5% annual dividend growth rate means your effective yield on the $50.00 you paid today will grow to:
Year 5
5.1%
yield on cost
Year 10
6.5%
yield on cost
Year 20
10.6%
yield on cost
A dividend yield calculator determines how much cash income a stock generates relative to its price — and projects how that income grows over time with dividend reinvestment (DRIP). Dividend yield is the annual dividend payment per share divided by the current share price, expressed as a percentage. The calculator also tracks yield on cost: what you effectively earn on your original purchase price as dividends grow year over year, which is the hidden superpower of long-term dividend investing.
Formula:
Dividend Yield = (Annual Dividend Per Share ÷ Current Share Price) × 100Yield on Cost = (Current Annual Dividend Per Share ÷ Your Original Purchase Price) × 100. With a 7% annual dividend growth rate, a 3% starting yield becomes a 6% yield on cost in just 10 years — meaning your income doubles even if the stock price is unchanged.
- 1
Enter the current share price of the stock
- 2
Enter the annual dividend per share (total of all quarterly or monthly payments)
- 3
Set the number of shares you own or plan to buy
- 4
Set an annual dividend growth rate (use historical data or analyst estimates — Dividend Aristocrats average 5–10%)
- 5
Choose your time horizon in years
- 6
Select payment frequency (quarterly for most U.S. stocks, monthly for REITs and some ETFs)
- 7
Toggle DRIP on or off to see the reinvestment compounding effect on income and portfolio value
- Dividend income provides cash flow that does not require selling shares — critical for retirement income planning
- Reinvesting dividends (DRIP) can nearly double your ending portfolio value compared to taking dividends as cash over 20+ years
- Yield on cost grows as dividends increase — long-term holders of dividend growers earn far more on their cost basis than current yield suggests
- Dividend growth rate is more important than starting yield: a 2% yield growing at 10%/year surpasses a static 5% yield in roughly 15 years
- Understanding dividend sustainability (payout ratio) prevents chasing unsustainable high-yield traps
- Retirees and income investors building a dividend income stream to cover living expenses
- Long-term investors evaluating whether to reinvest (DRIP) vs. take dividends as cash
- Investors comparing the income potential of multiple dividend stocks or ETFs
- Anyone wanting to project when their dividend income will cover a target monthly expense
- Value investors assessing if a high yield is attractive or a warning sign of an unsustainable payout
- •Hold dividend stocks in a Roth IRA to eliminate dividend taxes entirely, maximizing the DRIP compounding effect.
- •Track yield on cost (YOC) separately from current yield — YOC reveals the true return on your original investment as dividends grow.
- •Dividend growth rate is the most important factor for long-term income investors — prioritize it over starting yield.
- •Many top dividend stocks have increased dividends for 25–50+ consecutive years (Dividend Aristocrats and Kings) — longevity of increases signals financial strength.
DRIP Calculator
Model the full compounding effect of automatic dividend reinvestment over decades.
Try Calculator →Stock Portfolio Tracker
Track dividend income, gain/loss, and allocation across all your holdings.
Try Calculator →Compound Interest Calculator
Compare dividend compounding to pure compound interest growth.
Try Calculator →Retirement Savings Calculator
See how dividend income integrates into your retirement income plan.
Try Calculator →Have questions about using this calculator? Check out our financial guides or contact us for help.
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Frequently Asked Questions
What is dividend yield and how is it calculated?
Dividend yield is the annual dividend payment divided by the current stock price, expressed as a percentage. For example, if a stock pays $2.00 per share annually and trades at $50, the dividend yield is 4% (2 ÷ 50 = 0.04). It tells you how much cash income you receive relative to what you paid.
What is a good dividend yield?
A 'good' yield depends on your goals. Yields between 2–4% are typical for reliable dividend payers like consumer staples and utilities. Yields above 5–6% can be attractive but also signal elevated risk—companies sometimes cut dividends when they can't sustain high payouts. Focus on dividend growth history and payout ratio alongside the yield itself.
What is yield on cost?
Yield on cost (YOC) measures your annual dividend income as a percentage of what you originally paid per share—not the current price. If you bought a stock at $30 and it now pays $3/share annually, your YOC is 10% even if the current yield at today's price is only 3%. Long-term dividend growth investors often watch YOC as a sign their original purchase is paying off.
Should I reinvest dividends (DRIP)?
For long-term investors who don't need the income now, reinvesting dividends automatically compounds your returns by buying more shares. Over 20–30 years, DRIP can nearly double your final portfolio value compared to taking dividends as cash. If you rely on the income in retirement, taking cash makes more sense.
What is a payout ratio and why does it matter?
The payout ratio is the percentage of earnings paid as dividends. A payout ratio under 60% is generally sustainable—the company retains enough profit to grow and weather downturns. Payout ratios above 80–90% can signal that a dividend cut is coming, especially if earnings are falling.