Dividend Reinvestment (DRIP) Calculator
Reinvesting dividends buys more shares, which pay more dividends, which buy more shares — a compounding loop that can pull well ahead of taking the cash. This calculator runs both paths side by side using your starting yield, dividend growth, and price growth assumptions, so you can see the DRIP advantage and the income you would be building.
Value if dividends reinvested (DRIP)
$50,668
Value if dividends taken as cash
$37,569
DRIP advantage
$13,100
Shares held (DRIP)
381.9
Annual dividend income at end (DRIP)
$1,837
Reinvestment buys whole and fractional shares at the year's price. The cash path keeps the original shares and collects dividends separately. Nominal figures; ignores taxes, fees, and price volatility. Illustrative, not a forecast of any specific stock.
How DRIP compounding works
When dividends are reinvested, each payout buys additional shares at the current price. Those shares then receive their own dividends in future years, and if the company also raises its dividend, the income on a growing share count rises on two fronts at once. Over long horizons this share-count growth is what separates total return from simple price appreciation. Taking dividends as cash keeps your share count fixed, so you forgo that second compounding loop.
How to use it
Enter the amount invested and the current share price to set your starting share count, then the starting dividend yield, the rate you expect the dividend to grow each year, and an assumed annual price growth. The result shows the ending value if dividends are reinvested, the ending value if they are taken as cash, the difference, your final share count, and the annual dividend income you would be collecting by the end.
Limitations
This assumes steady dividend growth, steady price growth, and reinvestment at each year's price. Real dividends can be cut, prices are volatile, and reinvestment timing varies. It ignores taxes — which matter, because reinvested dividends are typically taxable in a standard account — as well as fees and inflation. Treat it as an illustration of the reinvestment mechanism, not a forecast of any specific stock.
FAQ
Is reinvesting dividends always better than taking cash?
For long-term growth of total value, reinvesting usually wins because of the extra compounding from a rising share count. Taking cash can still be right if you need income now. The calculator shows the size of the trade-off for your assumptions.
Does it account for dividend cuts or volatility?
No. It assumes steady dividend and price growth. Real companies can cut dividends and prices swing. Lower the growth inputs to stress-test a more conservative case.
Are taxes included?
No. Reinvested dividends are often taxable in a standard taxable account, which reduces the real DRIP advantage. The calculator ignores taxes, fees, and inflation and is an illustration, not advice.