Dividend Yield Calculator
See how much passive income your shares could generate.
Model DRIP compounding with dividend growth rate projection.
How dividends work
A dividend is like rent money from a property you own. Except instead of a building, you own a small piece of a company. Some companies pay shareholders a portion of their profits every quarter just for holding the stock. The yield is how much they pay compared to the share price.
The more shares you own, the more income you receive — completely passively. Many investors build a portfolio specifically to generate enough dividend income to cover their living expenses, which is one path to financial independence.
Dividend yield = Annual Dividend Per Share / Share Price. Yield on cost (YOC) adjusts this for your original purchase price and grows as dividends increase over time. DRIP compounding is calculated by reinvesting each dividend payment at current share price, modeled here with constant price assumption and variable dividend growth.
With DRIP enabled, each year's dividend buys additional shares: newShares = annualDiv / sharePrice. Total shares compound year over year. The chart shows annual income in the same dollar units for both scenarios — making the compounding effect of DRIP directly comparable to no-DRIP income.