Dividend Growth Calculator

How this calculator works

Instead of applying one blended return, the calculator tracks your position share by share, the same way a brokerage statement would. Every month it invests your contribution at the current share price. On each payout date it pays dividends based on your share count and the current dividend per share, and if DRIP is on, those dividends immediately buy more shares. Then, each month, the dividend per share and share price move up by the monthly equivalent of your annual rates, so they compound to exactly those annual figures.

The dividend growth rate you enter is treated as a compound annual growth rate (CAGR), the standard way to express how fast a dividend has risen. If you want to estimate it for a real stock, the next section and the dividend growth rate calculator cover the steps.

Reinvestment is where the interesting part happens. With the DRIP box ticked this works as a dividend reinvestment calculator: reinvested dividends buy shares, those shares pay their own dividends, and the cycle feeds itself. That compounding loop is exactly why long DRIP timelines bend upward instead of climbing in a straight line. Untick it and the same projection runs as a plain dividend income calculator, with payments accumulating as cash.

What the inputs mean

Starting dividend yield is the annual dividend divided by the share price. A stock paying $3.00 a year at $100 a share yields 3%. If you are working from a quarterly payment, multiply it by four first, or use the dividend yield calculator to convert it.

Annual dividend growth rate is how fast the payment per share rises each year, separate from the share price. Share price appreciation is the expected annual change in the price itself. Keeping them apart matters, because a dividend can grow steadily while the price goes nowhere, and the two produce very different results.

One combination deserves a second look. If the dividend grows faster than the share price, the yield on the share price rises every year, and over a long projection it can end up far above where it started. The calculator shows that implied yield under your results so you can judge whether the two assumptions fit together.

A worked example

Take the figures the calculator loads with: $10,000 to start, $250 a month, a 3% starting yield growing 6% a year, 5% price appreciation, quarterly payments, dividends reinvested, over 20 years.

The starting yield was 3%, so the entire difference comes from two decades of dividend growth compounding on a rising share count.

Taxes and inflation

Both are optional. If you enter a dividend tax rate, the calculator deducts it from every payment before anything is reinvested, so a taxed DRIP buys fewer shares and compounds off a smaller base. That's why the tax drag grows over long timelines rather than staying flat. Leave the rate at 0% for a tax-advantaged account. The inflation toggle doesn't change the underlying projection at all, it just restates the results in today's purchasing power so a number twenty years out means something you can actually picture.

What the calculator does not do

It doesn't model brokerage fees, fund expense ratios, dividend cuts, or market crashes, and it assumes your growth rates hold steady for the whole projection, which real markets never promise. The tax input is a single flat rate, not a bracket calculation. Treat the output as a planning estimate, not a prediction.

How to calculate dividend growth rate

This calculator projects forward from a growth rate you supply. That rate normally comes from working backward through a company's actual dividend history: the compound annual growth rate between an earlier annual dividend and today's, measured over the number of years between them.

The dividend growth rate (CAGR) calculator does that arithmetic, shows the formula with a worked example, and flags any year where the dividend was cut. Put the result in the dividend growth field above to project that pace forward.

Worth saying plainly: a historical rate is a starting point for an assumption, not a forecast. Companies cut dividends, and a long growth streak is evidence of past behavior rather than a commitment to future behavior. Try a lower rate alongside your base case and see how much the ending number moves.

Frequently asked questions

What formula does this dividend growth calculator use?

A share-based simulation: shares × dividend per share each payout, with optional reinvestment and monthly contributions. Each month the dividend per share and share price move up by the monthly equivalent of your annual rates, so they compound to exactly those annual figures. The dividend growth input follows the standard CAGR formula: (Ending Dividend ÷ Beginning Dividend)^(1/n) − 1.

What is a DRIP?

A dividend reinvestment plan. Rather than receiving dividends as cash, your dividends automatically purchase additional shares, and those new shares start earning dividends of their own.

Do I still pay taxes on reinvested dividends?

In a regular taxable brokerage account, generally yes, since dividends are taxable in the year they're paid even when reinvested. Tax-advantaged accounts follow different rules. You can enter your own effective rate above to see the drag, but the calculator applies one flat rate rather than doing a bracket calculation, so check with a tax professional for your specific situation.

What dividend growth rate should I use?

A sensible starting point is a stock's own historical dividend CAGR, then ask whether that pace is sustainable. Dividend Aristocrats, S&P 500 companies with at least 25 consecutive years of dividend increases, get attention precisely because of their long growth records. Just remember that history is not a guarantee.

What is yield on cost?

Your current annual dividend income divided by what you actually invested. It's the number in the last column of the results table, and watching it climb is the whole appeal of dividend growth investing.

How much do I need invested to earn $1,000 a month in dividends?

It's annual income divided by yield: $1,000 a month is $12,000 a year, so a 4% yield calls for $300,000 invested. This calculator answers a different question, which is how far contributions and dividend growth get you over time, so enter your own numbers above to see that. To work backward from an income target, use the monthly dividend income calculator, which also shows how the answer moves with the yield.

Is a dividend growth calculator the same as a dividend calculator?

Not quite. A plain dividend calculator often assumes the dividend stays flat, so it multiplies your shares by a fixed payout. A dividend growth calculator compounds the dividend upward each year. Over a year or two the difference is minor. Over twenty years it's usually the single largest factor in the result, which is why this tool treats the growth rate as a required input rather than an optional extra.

Does this calculator work for ETFs and REITs?

Yes. The inputs are generic, so enter the fund's current yield and whatever growth assumption you think is reasonable. One caveat: fund expense ratios aren't modeled yet, so for a fund charging a meaningful fee, your real-world result would come in slightly below the projection.

Related calculators

Every tool on the site is listed on the calculators page, and the background reading sits in guides, including how a fund can manufacture a high yield structurally.

• Monthly Dividend Income Calculator Work out the capital needed for a target monthly income
• Dividend Yield Calculator (with Yield on Cost) Current yield, yield on cost, and your redeployment hurdle
• DRIP Explained Guide: how dividend reinvestment compounds, and what it costs at tax time
• Monthly vs Quarterly Dividends Guide: does payment frequency actually change your returns?
• Yield on Cost Explained Guide: the metric half of dividend investing calls useless
• Dividend Taxes Explained Guide: qualified vs ordinary, and the rules that catch people out
• Dividend Growth Rate (CAGR) Calculator Find the CAGR from a real dividend history
• Dividend Aristocrats Guide: what the label actually screens for
• Dividend Capture Calculator Break-even after the price drop, costs and ordinary-income tax

You can read how this calculator was built or send a feature request.

Sources

Cedrick Reese built this calculator. Its simulation was checked by working the default inputs through by hand and comparing the result with the worked example on this page, and the dividend growth formula and the DRIP definition were checked against the references below. The calculator holds no market data, so the only things that can go out of date are those definitions and the assumptions you type in. The references were last reviewed in October 2026; if one changes, the page is reviewed again and the date at the top is updated.

The references behind the formula and definitions:

• Dividend growth (CAGR) formula: LegalClarity: How to Find Dividend Growth Rate, FASTGraphs: Dividend Growth Rate: Definition and How to Calculate, and Investing.com Academy: Dividend CAGR
• Dividend reinvestment plans (DRIPs): Investor.gov (U.S. Securities and Exchange Commission): Direct Investing
• How reinvestment compounds returns: Corporate Finance Institute: Dividend Reinvestment Plan (DRIP)