Dividend Growth Rate Calculator

What the dividend growth rate measures

Dividend yield tells you what a stock pays today. The dividend growth rate tells you how fast that payment is rising. For anyone holding for the long run, the second number often matters more than the first, because a modest dividend that climbs every year eventually overtakes a larger one that sits still.

It's expressed as a single annualized percentage, which makes it comparable across companies with completely different payout sizes and histories. A stock paying $0.40 a share and one paying $4.00 a share can be measured against each other on growth alone.

This page works backward from dividends that have already been paid. If you want to work forward from a rate you've chosen, use the dividend growth calculator on the homepage.

How this calculator works

The calculation is the compound annual growth rate, the same method used across the industry for annualizing any kind of growth:

Growth rate = (Ending Dividend ÷ Beginning Dividend)^(1/n) − 1

1. Find the total annual dividend per share for your starting year.
2. Find the total annual dividend per share for the most recent full year.
3. Count the years between them.
4. Apply the formula above.
5. Check your starting year. If the dividend had just been cut, the result will flatter the company.

Counting the years correctly

This is where most people go wrong, and it's worth slowing down on. If you have dividend figures for 2014 through 2024, that's eleven numbers but only ten years of growth. The gap between the first and last figure is what goes into the formula, not how many figures you wrote down.

Getting this wrong by one year doesn't sound like much, but it shifts the result noticeably. In detailed mode the calculator works the number out from your start and end years so you never have to think about it.

CAGR versus a simple average

You could instead add up each year's percentage change and divide by the number of years. That's the arithmetic average, and it will almost always come out higher than the CAGR, because it ignores the effect of compounding on an uneven series.

Detailed mode shows both. When they're close together, growth was steady. When the average sits well above the CAGR, the dividend moved in fits and starts, and the CAGR is the more honest summary of what happened.

What this calculator does not do

It doesn't fetch dividend data for you, so the figures have to come from your brokerage or the company's own investor relations pages. It doesn't adjust for stock splits, so use split-adjusted per-share figures if a split occurred during your period. It doesn't account for currency movement on foreign stocks, and it can't tell you whether a past rate will continue.

It also can't tell a regular dividend from a one-off. If a company paid a special dividend in one of your years, leave it out of that year's total before you enter it, or it will push the growth rate up or down depending on where it falls in your period.

Worked example

Say a company paid $1.50 per share in dividends five years ago and pays $2.25 per share today.

1. Divide the ending dividend by the beginning one: $2.25 ÷ $1.50 = 1.5
2. Raise that to the power of 1/5: 1.5^0.2 = 1.0845
3. Subtract 1: 0.0845, or 8.45% per year

The dividend grew 50% in total, but that's spread across five years of compounding, which is why the annual figure is 8.45% rather than 10%. At that pace the dividend would double in roughly 8.5 years.

Why the averaging method misleads

Picture a dividend that rises 20% one year and then falls 10% the next. Averaging those gives 5% a year. But run the actual numbers: 1.20 × 0.90 = 1.08, so the dividend is 8% higher after two years, which works out to 3.92% a year compounded. The 5% figure describes the percentages. The 3.92% figure describes the money.

Frequently asked questions

How do you calculate dividend growth rate?

Divide the current annual dividend per share by the dividend per share from n years ago, raise the result to the power of 1/n, then subtract 1. That gives the compound annual growth rate. A dividend that rose from $1.50 to $2.25 over five years grew about 8.45% per year.

What is the difference between CAGR and average growth rate?

A simple average adds up each year's growth rate and divides by the number of years. CAGR accounts for compounding. If a dividend grows 20% one year and falls 10% the next, the simple average is 5% but the CAGR is 3.92%. CAGR reflects what actually happened to the money, which is why it is the standard measure.

How many years should I measure dividend growth over?

It is a tradeoff. A shorter window reflects recent behavior but is noisier, since one unusual raise or freeze can dominate the result. A longer window smooths out one-off events but may include an era that no longer reflects how the company operates. Running both a short and a long window and comparing them is often more informative than picking one.

Where do I find a stock's dividend history?

Your brokerage account's transaction history is the most reliable record of dividends you have actually received. For researching a stock you do not own, most companies publish dividend history in the investor relations section of their own site, and ETF providers publish full distribution histories on the fund's page.

What if the dividend was cut during the period?

The calculator still works, but read the result carefully. Measuring from a year in which the dividend had just been cut produces a rate that overstates the normal trajectory, because the starting point is artificially low. In detailed mode the calculator flags any year where the dividend declined so you can see whether this is affecting your result.

Should I use quarterly or annual dividends?

Use annual totals. Add up all payments made in each year and enter that figure. Comparing one quarter against another can miss a mid-year raise or double-count a special dividend, which distorts the growth rate.

Does this calculator work for ETFs?

Yes. Enter the fund's total annual distribution per share for each year. Fund distributions tend to vary more than an individual company's dividend because they reflect the underlying holdings, so a longer measurement window is usually more informative for a fund.

Related calculators

You have a growth rate. The next step is projecting it forward.

• Dividend Growth Calculator Project income forward with DRIP, contributions, taxes and inflation
• Dividend Yield Calculator (with Yield on Cost) Current yield, yield on cost, and your redeployment hurdle
• Monthly Dividend Income Calculator Capital needed for a target monthly income
• DRIP Explained Guide to dividend reinvestment
• 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 Aristocrats Guide: what the label actually screens for
• Dividend Capture Calculator Break-even after the price drop, costs and ordinary-income tax

Read more about how these tools are built or send a correction.

Sources

Cedrick Reese built this calculator. It is plain arithmetic on the figures you type in and holds no dividend data, so the only thing that can age is the method, which was checked against the references below. The worked example on this page (1.5^0.2 = 1.0845, or 8.45%) and the 3.92% averaging example were recomputed by hand, and the calculator returns the same figures for the same inputs. 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 for the CAGR method:

• LegalClarity: How to Find Dividend Growth Rate
• FASTGraphs: Dividend Growth Rate, Definition and How to Calculate
• Investing.com Academy: What is Dividend CAGR
• Nasdaq Glossary: Compound Annual Growth Rate, which defines CAGR and shows the nth-root method on a worked example