Dividend Reinvestment (DRIP) Calculator
This dividend reinvestment (DRIP) calculator shows how automatically reinvesting dividends into more shares compounds your holdings over time — growing both your share count and your dividend income each year, not just your account balance. Enter your numbers to see the long-run effect.
How much you're starting with.
How much the dividend per share is expected to grow each year.
Expected yearly growth in the share price itself.
How many years you plan to hold and reinvest.
Final portfolio value
$55,130
How to use this dividend reinvestment (drip) calculator
- 1Initial investment and current share price: used to calculate your starting share count.
- 2Annual dividend per share and its expected growth rate: check the stock's dividend history for a realistic growth assumption.
- 3Annual share price growth: a separate assumption from dividend growth — a stock can grow its dividend even if the price itself is flat.
Understanding your results
Final portfolio value is your ending share count times the projected future share price. Final share count is the real story of DRIP investing — every reinvested dividend buys more shares, which then earn their own dividends, compounding on top of ordinary price appreciation.
The formula
Each year: new shares = (Shares × Dividend per share) ÷ Price, then Price and Dividend both growEach year, the total dividend received (share count times per-share dividend) buys additional shares at that year's price. Both the share price and the per-share dividend then grow at their own independent assumed rates for the following year — this is what makes DRIP compounding different from simple price appreciation: your share count itself grows every year, not just the value per share.
A worked example
A $10,000 investment at $50/share (200 shares), with a $1.50 annual dividend growing 5%/year and the share price growing 6%/year, held for 20 years: reinvested dividends steadily add shares on top of price growth, producing a meaningfully larger final portfolio value than price appreciation alone would — the exact figure depends on the compounding of both growing share count and growing price, best seen by adjusting the calculator's own numbers.
Notes for the UK, US and India
DRIP investing works best with genuinely dividend-growing companies — a static or shrinking dividend limits the compounding effect this calculator models. Many brokerages offer commission-free automatic dividend reinvestment, making this strategy easy to execute without manual effort each payout.
Frequently asked questions
Are reinvested dividends still taxable?+
In a taxable brokerage account, yes — dividends are taxable in the year received even if immediately reinvested, unlike in a tax-advantaged account like an IRA where reinvestment happens tax-free until withdrawal.
Does DRIP always beat taking dividends as cash?+
For long-term compounding growth, reinvesting generally builds a larger portfolio than taking cash — but if you need the income now (e.g. in retirement), taking dividends as cash may better match your actual goals.
What if a company cuts its dividend?+
This calculator assumes steady dividend growth — a real dividend cut would reduce both your income and the reinvestment amount, and often signals broader problems with the company worth investigating before assuming growth will resume.
Related calculators
Related articles
Financial Retirement Planner: How to Map Out Your Golden Years Without Losing Your Mind
Retirement
Retirement Planner: How to Map Your Future Without Losing Your Mind
Retirement
The 401k Planner Guide: How to Actually Map Your Retirement
Retirement
Systematic Withdrawal Plan Calculator: How to Turn Savings Into Regular Income
Investing