DRIP Calculator
Project dividend reinvestment: end shares, end value, and annual income — reinvested vs. not, side by side.
Your position & assumptions
Live toolReinvested (DRIP) projection
starting value $5,000.00
Reinvested vs. not reinvested
The gap looks small over short horizons but widens dramatically over long ones — that is the whole point of a DRIP. The not-reinvested scenario assumes dividend cash earns nothing.
Annual income trajectory
Cash received each year, the shares it buys at that year-end price, and your growing share count.
| Year | Dividend / share | Income | Shares after reinvestment | Year-end price |
|---|---|---|---|---|
| 1 | $1.5000 | $150.00 | 102.8302 | $53.00 |
| 2 | $1.5750 | $161.96 | 105.7130 | $56.18 |
| 3 | $1.6538 | $174.82 | 108.6487 | $59.55 |
| 4 | $1.7364 | $188.66 | 111.6375 | $63.12 |
| 5 | $1.8233 | $203.54 | 114.6795 | $66.91 |
| 6 | $1.9144 | $219.54 | 117.7749 | $70.93 |
| 7 | $2.0101 | $236.74 | 120.9239 | $75.18 |
| 8 | $2.1107 | $255.23 | 124.1265 | $79.69 |
| 9 | $2.2162 | $275.09 | 127.3830 | $84.47 |
| 10 | $2.3270 | $296.42 | 130.6934 | $89.54 |
| 11 | $2.4433 | $319.33 | 134.0577 | $94.91 |
| 12 | $2.5655 | $343.93 | 137.4761 | $100.61 |
| 13 | $2.6938 | $370.33 | 140.9487 | $106.65 |
| 14 | $2.8285 | $398.67 | 144.4753 | $113.05 |
| 15 | $2.9699 | $429.08 | 148.0561 | $119.83 |
| 16 | $3.1184 | $461.70 | 151.6910 | $127.02 |
| 17 | $3.2743 | $496.68 | 155.3800 | $134.64 |
| 18 | $3.4380 | $534.20 | 159.1231 | $142.72 |
| 19 | $3.6099 | $574.42 | 162.9202 | $151.28 |
| 20 | $3.7904 | $617.54 | 166.7712 | $160.36 |
Model simplification: dividends are paid once per year at year-end and, if reinvesting, are immediately reinvested at that year-end price. Real DRIPs typically compound quarterly; annual compounding modestly understates the reinvestment effect. Fractional shares are allowed throughout. Taxes, fees, and payout timing are excluded.
How it works
A dividend reinvestment plan (DRIP) takes the cash a stock pays you and immediately buys more shares of the same stock — including fractional shares. Those new shares pay dividends too, so your income grows from two directions at once: the company raising its per-share dividend, and your share count climbing every year.
This calculator projects that snowball year by year. It starts from your share count, the current price, and the current dividend yield, then grows the dividend and the share price at the constant annual rates you choose. Each year's dividend cash either buys new shares at that year-end price (reinvest on) or piles up as cash earning nothing (reinvest off). Both scenarios are always computed so you can see the compounding gap side by side.
One deliberate simplification, stated up front: dividends are modeled as paid once per year at year-end and reinvested at that year-end price. Real DRIPs typically reinvest quarterly, which compounds slightly faster — so this model modestly understates the reinvestment effect.
The formula
With S₀ = starting shares, P₀ = starting price, y = dividend yield ÷ 100, gd = dividend growth ÷ 100, gp = price growth ÷ 100, and t = 1…N years:
- Dividend per share: Dₜ = P₀ × y × (1 + gd)t−1 — the first year's dividend per share is today's price times today's yield, growing at the dividend growth rate each year after.
- Share price: Pₜ = P₀ × (1 + gp)t — the price compounds at the price growth rate once per year.
- Annual income:Incomeₜ = Sₜ₋₁ × Dₜ — cash received in year t equals the shares held during year t times that year's dividend per share.
- Share accumulation (reinvest on):Sₜ = Sₜ₋₁ + Incomeₜ ÷ Pₜ — each year's dividend cash buys new fractional shares at the year-end price. With reinvest off, Sₜ = S₀ forever.
- Total dividends:the sum of every year's income. The two scenarios differ because the DRIP scenario holds more shares each year.
- End value, reinvested: SN × PN — final share count times final price.
- End value, not reinvested: S₀ × PN + all dividends accumulated as zero-interest cash.
- Reinvestment advantage: the difference between those two end values, in dollars and as a percent of the starting position (S₀ × P₀).
- Total return: (end value ÷ starting value − 1) × 100 for the featured scenario.
Display rounding: USD to cents, shares to 4 decimals; all intermediate math runs at full precision.
Worked example
Inputs: 100 shares at $50.00, a 3% dividend yield (y = 0.03), 5% dividend growth, 6% price growth, 3 years (kept short so every step is visible — the same recursion runs for any horizon), reinvest on. Starting value = 100 × $50.00 = $5,000.00.
- Year 1: D₁ = 50 × 0.03 = $1.5000. Income = 100 × 1.5000 = $150.00. P₁ = 50 × 1.06 = $53.00. New shares = 150.00 ÷ 53.00 = 2.8302 → S₁ = 102.8302.
- Year 2: D₂ = 1.5000 × 1.05 = $1.5750. Income = 102.8302 × 1.5750 = $161.96. P₂ = 53.00 × 1.06 = $56.1800. New shares = 161.9575 ÷ 56.1800 = 2.8828 → S₂ = 105.7130.
- Year 3: D₃ = 1.5750 × 1.05 = $1.653750. Income = 105.7130 × 1.653750 = $174.82. P₃ = 56.1800 × 1.06 = $59.5508. New shares = 174.8229 ÷ 59.5508 = 2.9357 → S₃ = 108.6487.
Reinvested outputs: end shares = 108.6487; end value = 108.6487 × 59.5508 = $6,470.12; total dividends = 150.00 + 161.96 + 174.82 = $486.78; total return = (6,470.12 ÷ 5,000 − 1) × 100 = 29.40%. Notice the income trajectory — $150.00 → $161.96 → $174.82 — grew about 8.0% per year (161.96 ÷ 150.00 − 1 = 7.97%) even though the dividend itself grew only 5%, because reinvestment also grows the share count.
Comparison with reinvest off: shares stay at 100. Cash collected = 100 × (1.5000 + 1.5750 + 1.653750) = $472.88 (exactly 472.875). Stock value = 100 × 59.5508 = $5,955.08, so the not-reinvested end value is $6,427.96 (a 28.56% total return). Reinvestment advantage = 6,470.12 − 6,427.96 = $42.16, i.e. 0.84% of the starting position — small over 3 years, but the gap widens dramatically over long horizons.
FAQ
What is a DRIP?
A dividend reinvestment plan (DRIP) automatically uses cash dividends to buy more shares — including fractional shares — of the same stock, so future dividends are paid on a growing share count.
How does this calculator model reinvestment?
It compounds annually: dividends are assumed paid once per year at year-end and reinvested at that year-end price, with the dividend and share price each growing at constant rates. Real DRIPs usually reinvest quarterly, which compounds slightly faster.
Why does my dividend income grow faster than the dividend growth rate?
Reinvestment adds shares every year, so income growth compounds from two sources — the per-share dividend increase and the rising share count. In the example above, a 5% dividend growth rate produced roughly 8% annual income growth.
Does the calculator include taxes or fees?
No. In the US, dividends in a taxable account are generally taxable in the year received even when reinvested (rules vary and change; as of 2026). This tool is an educational projection, not a tax estimate.
Can I model a dividend cut or a falling share price?
Yes — enter a negative dividend growth rate or price growth rate. Falling prices actually accelerate share accumulation, since each reinvested dollar buys more shares.
What happens if I turn reinvestment off?
The calculator holds your share count constant and accumulates dividends as cash earning nothing, then shows the end value side by side with the reinvested scenario so you can see the compounding gap.
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Educational disclaimer
This calculator is an educational projection tool, not investment, financial, or tax advice, and it never suggests that any specific yield or stock is "good." Projections use constant growth rates and annual compounding, which no real stock follows. Dividends are not guaranteed and can be cut to zero. In the US, reinvested dividends are generally still taxable in taxable accounts in the year they are paid (educational note, not tax advice; rules vary and change — as of 2026). Taxes, fees, and payout timing are excluded from the model. Do your own research or consult a qualified professional before making investment decisions.