Dividend Calculator: Returns on Reinvested Dividends
Our dividend calculator can estimate your long-term returns on a dividend stock, assuming dividends are reinvested.
Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.
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.
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.
How to use NerdWallet’s dividend calculator
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 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.
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.
» Check out some of the all-around best brokerage accounts for stock trading.