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DRIP / Dividend Reinvestment Calculator

Project dividend reinvestment growth over time with yield-on-cost tracking, compounding charts, and income projection tables.

Tested tool guide Tested browser tools Checked August 16, 2026

What DRIP / Dividend Reinvestment Calculator does and how it behaves

This projector follows a dividend-paying position through repeated reinvestment and reports how its projected value, dividend income, and yield on cost change over time. The compounding charts show the cumulative effect of using each distribution to increase the holding, while the income projection tables expose the resulting cash-flow estimates. The easiest figure to misread is yield on cost: it relates dividend income to invested cost, not to the position's projected market value at that point.

How the result is produced

1

Dividend reinvestment cycle

The projection treats dividends as amounts reinvested into the same position. Reinvested value enlarges the dividend-producing base for later periods, allowing later distributions to reflect both the starting investment and earlier reinvestments. This feedback creates the DRIP compounding shown in the growth charts. The result remains dependent on the entered dividend and growth assumptions.

2

Income and yield-on-cost views

The income tables translate the projected holding into periodic dividend estimates. Yield on cost expresses annual dividend income relative to invested cost rather than the position's contemporaneous market value. This makes it useful for tracking income growth against money committed, but unsuitable as a substitute for current dividend yield when comparing investments at future market prices.

Good uses

  • Estimate the dividend income a long-term holding could produce after several years of reinvesting every distribution.
  • Compare conservative and optimistic dividend-growth scenarios before choosing an income target or investment horizon.
  • See whether reinvestment could move a portfolio toward a future annual-income goal without treating current dividends as spendable cash.

Limits and checks

  • Dividend growth, yield, and investment growth assumptions are scenarios, not forecasts; dividend payments can be reduced, suspended, or changed.
  • Do not assume the projection includes taxes, brokerage charges, reinvestment discounts, or limits on fractional-share purchases unless those items appear as inputs.
  • A rising yield on cost does not mean the security offers that yield to a new buyer; current yield uses current market price instead.

Common questions

Does a high projected yield on cost mean the investment will have a high dividend yield then?

No. Yield on cost compares projected annual dividends with the cost attributed to the investment. Current dividend yield compares annual dividends with the security's current market value. Growth in annual dividend income can therefore produce a high yield on cost, while price appreciation may leave the yield available at the future market price much lower.

Can I spend the projected dividend income and still receive the displayed DRIP growth?

No, not for the same dividends. DRIP compounding requires distributions to remain invested so they can enlarge the position and contribute to later income. The projected income can describe what the holding generates, but withdrawing that income instead of reinvesting it changes the future share balance and breaks the displayed reinvestment path.

References and verification

The behavioral notes were checked against the browser implementation. Standards and primary references below define the relevant format, formula, or platform behavior.

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