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Dividend Calculator: Returns on Reinvested Dividends
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Dividend Calculator: Returns on Reinvested Dividends
Our dividend calculator can estimate your long-term returns on a dividend stock, assuming dividends are reinvested.
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Lead Writer
9 years of experience Expertise Stocks ETFs economic newsSam Taube writes about investing for NerdWallet. He has covered investing and financial news since earning his economics degree from the University of Maryland in 2016. Sam has previously written for Investopedia, Benzinga, Seeking Alpha, Wealth Daily and Investment U, and has worked as an editor for Investment U, Wealth Daily and Haven Investment Letter. He is based in Brooklyn, New York.
Sam Taube writes about investing for NerdWallet. He has covered investing and financial news since earning his economics degree from the University of Maryland in 2016. Sam has previously written for Investopedia, Benzinga, Seeking Alpha, Wealth Daily and Investment U, and has worked as an editor for Investment U, Wealth Daily and Haven Investment Letter. He is based in Brooklyn, New York. Published in Lead Writer + more + more
Managing Editor
12 years of experience Expertise Brokerage accounts stock market cryptocurrencyChris Davis is a Managing Editor on the Investing team. He has passed the Series 65 (Uniform Investment Adviser Law Exam) and covered the stock market, investing strategies, investment accounts and cryptocurrency. His work has appeared in The Associated Press, The Washington Post, MSN, Yahoo Finance, MarketWatch, Newsday and TheStreet.
Chris Davis is a Managing Editor on the Investing team. He has passed the Series 65 (Uniform Investment Adviser Law Exam) and covered the stock market, investing strategies, investment accounts and cryptocurrency. His work has appeared in The Associated Press, The Washington Post, MSN, Yahoo Finance, MarketWatch, Newsday and TheStreet. Published in Managing Editor + more + moreDividend stocks are popular among investors for a reason. In addition to potentially rising in price, they provide income in the form of regular dividend payments. If those dividends are reinvested in the stock, they can compound your returns.
Dividend stocks are popular among investors for a reason. In addition to potentially rising in price, they provide income in the form of regular dividend payments. If those dividends are reinvested in the stock, they can compound your returns.One small downside of this kind of investing is the complexity of the math behind it. To calculate your total return on a dividend stock investment you’ll need to account for stock price growth, dividend yield, dividend frequency, holding period and more.
One small downside of this kind of investing is the complexity of the math behind it. To calculate your total return on a dividend stock investment you’ll need to account for stock price growth, dividend yield , dividend frequency, holding period and more.Our dividend calculator can make this easier. Just fill out the fields below for an estimate of your total returns from a dividend stock investment.
Our dividend calculator can make this easier. Just fill out the fields below for an estimate of your total returns from a dividend stock investment.» See our list of the best brokers for dividend investing.
» See our list » See our list of the best brokers for dividend investing .How to use NerdWallet’s dividend calculator
How to use NerdWallet’s dividend calculatorEnter your initial investment amount. If you don’t know the dollar amount you intend to invest, you can multiply the price of the stock in question by the number of shares you intend to buy.
Enter your initial investment amount. Enter your initial investment amount. If you don’t know the dollar amount you intend to invest, you can multiply the price of the stock in question by the number of shares you intend to buy.Enter your holding period in years. This calculator assumes that you will hold the dividend stock in question for at least one year. A shorter holding period may incur short-term capital gains tax rates, which are usually higher than long-term rates. It also may make you ineligible to receive the dividend. But you don’t need to enter a whole number — 7.5 years is acceptable, for example.
Enter your holding period in years. Enter your holding period in years. This calculator assumes that you will hold the dividend stock in question for at least one year. A shorter holding period may incur short-term capital gains tax rates, which are usually higher than long-term rates. It also may make you ineligible to receive the dividend. But you don’t need to enter a whole number — 7.5 years is acceptable, for example.Enter the stock’s annual dividend yield. You can find this information by googling the stock’s ticker symbol, or by looking it up on a financial data website such as Finviz or Yahoo Finance.
Enter the stock’s annual dividend yield. Enter the stock’s annual dividend yield. You can find this information by googling the stock’s ticker symbol, or by looking it up on a financial data website such as Finviz or Yahoo Finance.Enter your best guess of the stock’s annual percentage increase in price. The average stock market return, as measured by the S&P 500 index over the last century, is about 10% per year, not accounting for inflation. You can use that number as a baseline, or enter 0% if you want to see your potential gains from dividend payments alone.
Enter your best guess of the stock’s annual percentage increase in price. Enter your best guess of the stock’s annual percentage increase in price. The average stock market return , as measured by the S&P 500 index over the last century, is about 10% per year, not accounting for inflation . You can use that number as a baseline, or enter 0% if you want to see your potential gains from dividend payments alone.Choose your dividend payment frequency. Some dividend stocks pay dividends annually. Others pay out twice a year or quarterly, and a few are monthly dividend stocks. Dividend frequency determines the rate at which your investment is compounded, which can affect your returns.
Choose your dividend payment frequency. Choose your dividend payment frequency. Some dividend stocks pay dividends annually. Others pay out twice a year or quarterly, and a few are monthly dividend stocks . Dividend frequency determines the rate at which your investment is compounded, which can affect your returns.Click “Calculate.” This will reveal your pre-tax ending balance and total return, which is the balance and return you’ll get if you’re investing within a tax-advantaged account such as a 401(k) plan or 529 plan.
Click “Calculate.” Click “Calculate.” This will reveal your pre-tax ending balance and total return, which is the balance and return you’ll get if you’re investing within a tax-advantaged account such as a 401(k) plan or 529 plan .» Check out some of the all-around best brokerage accounts for stock trading.
» Check out » Check out some of the all-around best brokerage accounts for stock trading .More calculators to help with your investing goals
More calculators to help with your investing goals Investment calculator Retirement calculator 401(k) calculator Roth IRA calculator Mutual fund calculator Stock calculator Frequently asked questionsDividend yield is the annual percent return on an investment from dividend payments. For a stock or dividend ETF, dividend yield is equal to the sum of the last twelve months of dividend payments per share, divided by the current share price. Forward dividend yield is equal to the sum of the next twelve months of projected dividend payments per share, divided by the current share price.
Dividend yield is the annual percent return on an investment from dividend payments. For a stock or dividend ETF , dividend yield is equal to the sum of the last twelve months of dividend payments per share, divided by the current share price. Forward dividend yield is equal to the sum of the next twelve months of projected dividend payments per share, divided by the current share price.Since a stock or fund's dividend yield depends on its current share price, it often bobs around throughout the trading day. You can often find a stock's average dividend yield over the last five years, or some other timeframe, on a financial statistics site such as Yahoo Finance.
Since a stock or fund's dividend yield depends on its current share price, it often bobs around throughout the trading day. You can often find a stock's average dividend yield over the last five years, or some other timeframe, on a financial statistics site such as Yahoo Finance.Stocks and funds with very high dividend yields may boost your returns, but they may not be able to sustain those high yields indefinitely. If a stock is paying out more in dividends per share than it brings in in earnings per share (EPS), it will eventually have to cut its dividend or borrow money to cover it.
Stocks and funds with very high dividend yields may boost your returns, but they may not be able to sustain those high yields indefinitely. If a stock is paying out more in dividends per share than it brings in in earnings per share (EPS) , it will eventually have to cut its dividend or borrow money to cover it.Investors may want to consider dividend stability along with yield when shopping for dividend stocks. The Dividend Aristocrats, for example, are a group of S&P 500 stocks that have increased their dividend payouts every year for the last 25 years or more.
Investors may want to consider dividend stability along with yield when shopping for dividend stocks. The Dividend Aristocrats , for example, are a group of S&P 500 stocks that have increased their dividend payouts every year for the last 25 years or more.Dividend yield is the annual percent return on an investment from dividend payments. For a stock or
dividend ETF
, dividend yield is equal to the sum of the last twelve months of dividend payments per share, divided by the current share price. Forward dividend yield is equal to the sum of the next twelve months of projected dividend payments per share, divided by the current share price.
Since a stock or fund's dividend yield depends on its current share price, it often bobs around throughout the trading day. You can often find a stock's average dividend yield over the last five years, or some other timeframe, on a financial statistics site such as Yahoo Finance.
Stocks and funds with very high dividend yields may boost your returns, but they may not be able to sustain those high yields indefinitely. If a stock is paying out more in dividends per share than it brings in in
earnings per share (EPS)
, it will eventually have to cut its dividend or borrow money to cover it.
Investors may want to consider dividend stability along with yield when shopping for dividend stocks. The
Dividend Aristocrats
, for example, are a group of S&P 500 stocks that have increased their dividend payouts every year for the last 25 years or more.