Dividend Yield & Reinvestment Calculator
Calculate stock dividend yields and project future returns with DRIP (Dividend Reinvestment) compounding logic.
About
Dividend yield is a critical financial ratio indicating how much a company pays out in dividends each year relative to its stock price. For income investors, this metric defines the cash flow efficiency of an asset. However, the true power of dividend investing lies in compounding - reinvesting payouts to purchase more shares (DRIP).
This calculator projects the growth of an investment by accounting for both yield and annual contribution. It isolates the "snowball effect" where interest earns interest, distinguishing between simple cash payouts and a reinvestment strategy over a 5 to 10-year horizon.
Formulas
Current Dividend Yield Y:
Future Value with Reinvestment (Compound):
Where P is principal, r is annual yield rate, and n is years.
Reference Data
| Stock Price ($) | Annual Div ($) | Yield (%) | Sector Avg |
|---|---|---|---|
| 100 | 1.50 | 1.5 | Tech |
| 50 | 2.00 | 4.0 | Utilities |
| 20 | 1.20 | 6.0 | REITs |
| 150 | 4.50 | 3.0 | Consumer Goods |
| 80 | 2.80 | 3.5 | Banking |
| 40 | 3.20 | 8.0 | BDCs (High Risk) |
| 200 | 1.00 | 0.5 | Growth |
| 25 | 0.00 | 0.0 | Non-payer |