Annual dividend income, and what reinvesting it turns into over the years
Estimates only, not financial advice. What you type stays on your device. Updated on 25 Oct 2026.A 10,000 dollar holding yielding 3.50% pays 350 a year, or 87.50 a quarter. Reinvest every payment for twenty years while the dividend grows 5% a year and the same purchase pays 1,864 a year, a yield on cost of 18.64%, because the dividend is measured against what you paid rather than today's price.
Enter the Amount invested and the Share price you pay.
Under The dividend figure you have, choose Yield (%) or Dollars per share a year, then type it.
Choose how often it is Paid, and whether to Reinvest every payment.
Set Dividend growth a year, Share price growth a year and For how many years.
Read Dividend income in year one, and the income, shares and value at the end of the period.
Three numbers get confused with each other whenever dividends are discussed, and this page keeps them apart.
Yield is the annual dividend divided by the share price. It describes what a buyer would get today, and it changes every time the price moves, which is why a stock that has fallen appears to yield more.
Income is the yield applied to your holding. A 10,000 dollar position at 3.50% pays 350 a year, and at a quarterly schedule that arrives as 87.50 four times.
Yield on cost is the annual dividend measured against what you originally paid. It cannot be looked up anywhere, because it depends on your purchase, and it is the figure that answers whether holding a dividend payer for a decade actually worked. A dividend rising 5% a year doubles in fourteen years while your cost stays fixed, so the two figures separate steadily.
Reinvestment is modelled payment by payment rather than once a year, because that is what happens: a quarterly dividend buys shares four times at four different prices, and those shares receive the next payment. Rolling that up into an annual step visibly understates the share count within five years.
The tax setting matters more than people expect. In a taxable American account a dividend is income in the year it is paid, whether it reaches your bank or buys more shares, so a rate entered here is deducted before anything is reinvested. In an IRA or a 401(k) nothing is due as it is paid, and zero is the right setting. Whether a dividend is qualified depends on the company and how long you held it, so the rate is yours to decide rather than ours to assume.
No company's yield is published on this page, and none ever will be. Yields move daily and differ from the one your own purchase locked in. Everything runs in your browser. Estimates only, not financial advice.
Multiply the number of shares by the annual dividend per share, or multiply the amount invested by the yield, which comes to the same figure. A 10,000 dollar holding at a 3.50% yield pays 350 a year. Divide by four for a quarterly payer, or by twelve for a monthly one.
Twelve thousand a year at a 4% yield needs 300,000 invested; at 3% it needs 400,000; at 6% it needs 200,000. The share price does not enter into it, only the yield. Higher yields usually mean either a higher payout ratio or a price the market has marked down for a reason.
Yes, in a taxable American account. The dividend is income in the year the company pays it, whether the money reaches your bank or buys more shares, and a 1099-DIV arrives either way. Enter your rate above and only the after-tax amount is reinvested. In an IRA or a 401(k), leave the rate at zero.
Yield on cost is the current annual dividend divided by what you originally paid, rather than by today's share price. Buy at 50 with a 1.75 dividend and the yield is 3.50%; fifteen years of 5% increases take the dividend to 3.64, so the same purchase now yields 7.28% on its cost.
Reinvesting compounds, so over long periods it produces more: each payment buys shares that receive the next payment. Taking the cash produces income you can spend or invest elsewhere. Run both settings above with the same assumptions to see the size of the gap before deciding which suits the account.
Yields move with the share price every trading day, differ between share classes, and are never the yield your own purchase locked in. A figure printed here would be wrong for most readers on most days, so the yield is taken from the quote or annual report in front of you instead.
Dividends are declared by a board rather than owed under a contract, so a payment can be reduced or stopped at any meeting, and companies under pressure often do exactly that. Set the growth rate negative above to see what a shrinking dividend does to the projection over ten or twenty years.
Formula only: no rates or limits are read from an official source.
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Also works as: Dividend Income Calculator.
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