DRIP Calculator: Dividend Reinvestment Growth Projector

See how reinvesting every dividend payout, plus share price appreciation and extra contributions, compounds your portfolio value, share count, and future income over time.

Your Investment Details
The lump sum you are starting your DRIP position with today.
$
The price per share today. Defaults to $100 for easy math if left as is.
$
The annual dividend as a percentage of the current share price.
%
How often the dividend is paid out and reinvested.
Growth & Contributions
Expected yearly growth in the share price itself, separate from dividends.
%
Extra cash you plan to invest each year, spread evenly across payout periods.
$
How many years you plan to let the DRIP run.
Your DRIP Projection

Updates automatically as you change any field above.

Final Portfolio Value
$0
after 10 years of dividend reinvestment
Total Principal Invested
$0
Total Dividends Reinvested
$0
Final Share Count
0
Projected Annual Dividend Income
$0
Where the Final Value Comes From
Principal Invested Dividends Reinvested Share Price Appreciation
Year-by-Year DRIP Breakdown
Year Share Price Shares Held Dividends Reinvested
(This Year)		 Cumulative Dividends Portfolio Value
Key Terms Explained
DRIP (Dividend Reinvestment Plan)
An automatic plan that uses your cash dividend payments to buy more shares of the same stock, often including fractional shares, instead of paying the dividend out to you as cash.
Dividend Yield
The annual dividend per share divided by the current share price, expressed as a percentage. It shows how much income a stock generates relative to its price.
Compound Interest
Growth on growth. When reinvested dividends and gains themselves start generating further dividends and gains, the total balance grows at an accelerating, exponential pace.
Share Price Appreciation
The increase in a stock's market price over time, separate from any dividends paid. Combined with dividends, it forms a stock's total return.
Principal
The original amount of money you invest, plus any additional contributions you add later, before counting any investment gains or reinvested dividends.
Payout Ratio
The percentage of a company's earnings that it pays out as dividends. A very high payout ratio can signal limited room for future dividend growth or risk of a cut.
Ex-Dividend Date
The cutoff date on which a stock begins trading without the value of its next dividend. You generally need to own the shares before this date to receive that payout.
Total Return
The combined return an investment produces from both dividends, including reinvested ones, and share price appreciation over a given period.
Dividend Growth Rate
The annualized rate at which a company increases its dividend per share over time. Consistent dividend growth is often viewed as a sign of financial health.

The Complete Guide to Dividend Reinvestment (DRIP) Investing

Reinvesting dividends is one of the simplest, most automatic ways to put compounding to work in a portfolio. This guide walks through how the calculator above works and answers the questions investors ask most often about DRIPs.

A DRIP, or Dividend Reinvestment Plan, automatically uses the cash dividends a stock pays you to buy more shares of that same stock, often including fractional shares and frequently with no extra commission. Instead of dividends landing in your account as spendable cash, they are immediately put back to work.

This creates a compounding loop: more shares generate more total dividend income, and that larger dividend payment buys even more shares at the next payout. Layer in share price appreciation over time and the effect snowballs, since each new share also benefits from future price growth and future dividends.

Over long time horizons, decades of dividend reinvestment can account for a substantial portion of a stock's total return, which is why DRIPs are a core strategy for buy and hold, long term investors.

No, and a very high yield can actually be a warning sign. Dividend yield is calculated as:

Dividend Yield = Annual Dividend per Share / Current Share Price

Because price sits in the denominator, a falling stock price will mechanically push the yield higher, even if the company has not raised its dividend at all. A yield that looks unusually generous compared to similar companies may reflect the market pricing in financial trouble, an unsustainable payout ratio, or an upcoming dividend cut.

Before relying on a high yield, it helps to check:

  • The payout ratio, and whether earnings comfortably cover the dividend
  • The company's history of maintaining or growing the dividend
  • The overall reason the share price has dropped, if it has

A moderate, well covered, and steadily growing dividend is often a stronger long term signal than a headline grabbing high yield.

In a standard taxable brokerage account, yes. Reinvested dividends are still treated as income in the year they are paid, even though you never see the cash and it goes straight back into buying more shares.

  • Qualified dividends are generally taxed at lower long term capital gains rates.
  • Non-qualified, or ordinary, dividends are taxed as regular income.
  • Your broker reports these amounts to you each year, typically on a 1099-DIV.

The picture changes inside tax advantaged accounts such as a 401k, traditional IRA, or Roth IRA, where reinvested dividends are not taxed in the year they are received.

This is general education only, not tax advice, so it is worth confirming your specific situation with a qualified tax professional.

Share price appreciation and dividend reinvestment compound together in two reinforcing ways:

  • Existing shares grow in value. Every share you already own, including the ones purchased with reinvested dividends, becomes worth more as the price rises, increasing your total portfolio value directly.
  • New shares are added on top. Because the dividend payout in dollars depends on both your share count and the dividend rate, a rising share price environment with steady or growing dividends tends to produce larger dollar payouts over time, which in turn buy more new shares.

The result is that total return from a dividend growth stock is rarely just the dividend yield or just the price gain in isolation. It is the interaction of both: more shares, a higher per share dividend, and a higher per share price, all working on each other across the time horizon. The calculator above models this by reinvesting each period's dividend into new shares and then appreciating the share price before the next period begins.

Disclaimer: This calculator provides an unofficial estimate for educational purposes only. It assumes a constant dividend yield, a constant compounded share price appreciation rate, and no fees or taxes. Real markets fluctuate, dividends can be cut or raised, and share prices do not move in a smooth line. This tool does not provide investment, tax, or financial advice. Consult a licensed financial advisor before making investment decisions.