Dividend Calculator 2026 - Yield & Reinvestment (DRIP)

The complete formula for portfolio growth with dividend reinvestment and regular contributions is: $$FV = P \left(1 + \frac{r_p + r_d}{n}\right)^{nt} + PMT \left[ \frac{\left(1 + \frac{r_p + r_d}{n}\right)^{nt} - 1}{\frac{r_p + r_d}{n}} \right]$$ Where: $FV$ is future value, $P$ is initial capital, $r_p$ is stock price appreciation rate, $r_d$ is dividend yield, $n$ is compounding frequency per year, $t$ is time in years, and $PMT$ is the periodic contribution amount.

The dividend yield represents the annual dividend income as a percentage of the current share price: $$Yield = \frac{Annual\ Dividend\ Per\ Share}{Price\ Per\ Share} \times 100\%$$ In our projection, we apply this yield to the current portfolio value each period.

When DRIP is enabled, net dividend payments (after tax) are automatically used to purchase additional shares: $$New\ Shares = \frac{Dividend\ \times (1 - Tax\ Rate)}{Current\ Share\ Price}$$ These new shares then generate their own dividends, creating a compounding effect.

Taxes are deducted from dividend distributions before reinvestment: $$Net\ Dividend = Gross\ Dividend \times (1 - t)$$ Where $t$ is the tax rate. This models a standard taxable brokerage account where dividends are taxed as income.