Dividend Reinvestment (DRIP) Calculator

Reinvested dividends compounding alongside price growth

A $10,000 investment at $50/share, yielding 2.4% with 6% annual price appreciation, grows to $34,204.82 after 15 years. Along the way, $6,799.11 in dividends gets reinvested rather than paid out, and the share count grows from the initial 200 shares to 285.45 shares as each dividend buys more stock at the (rising) share price.

That extra 85.45 shares exists purely because dividends were reinvested instead of taken as cash -- this is the core mechanic of DRIP investing: yield compounds into more shares, and those additional shares then earn their own dividends the following year.

The simulation runs year by year: each year, the dividend is calculated on the current share count and price, reinvested at that year's price, and the price then grows by the appreciation rate before the next year's dividend is calculated.

What's held constant that wouldn't be in real markets

Constant yield and growth. Taxes on dividends are not withheld here. Real dividend yields fluctuate (companies raise, cut, or suspend dividends), and price growth is never a smooth 6% every year -- this model assumes both stay fixed for the full 15 years.

Dividends are taxable in the year received even when reinvested (unless held in a tax-advantaged account), so the $34,204.82 figure overstates what you'd actually keep in a taxable brokerage account after dividend taxes.

Investment, price, and years must all be greater than zero -- a zero share price would make the initial share count undefined.

Comparing DRIP to other approaches

For a stock with little or no dividend but stronger price appreciation, the growth math looks different -- compare a lump-sum, no-dividend scenario on the Stock Dollar-Cost Averaging Calculator instead.

If dividend yield alone (not the reinvestment compounding) is what you're evaluating across different stocks, the Dividend Yield Calculator isolates just that figure.

Frequently Asked Questions (FAQ)