Dividend Calculator

A solid dividend yield typically ranges from 2% to 5%. Yields above 5% may signal higher risk or an unsustainable payout. Blue-chip companies like those in the Dividend Aristocrats list usually offer yields between 2-4% with consistent annual increases.

Dividend growth rate is the annual percentage by which a company increases its dividend payment. A stock yielding 3% with a 7% annual growth rate will yield over 5.9% on your original cost basis after 10 years. This compounding effect makes dividend growth investing powerful for long-term income.

Reinvesting dividends through a DRIP (Dividend Reinvestment Plan) allows you to purchase additional shares, accelerating compound growth. During the accumulation phase, reinvesting is generally recommended. Once you need income in retirement, taking cash dividends can provide a steady income stream without selling shares.

Yield on cost measures your current dividend income relative to your original purchase price rather than the current market price. If you bought a stock at $100 with a 3% yield and dividends have grown, your yield on cost may now be 5% or higher even if the current yield for new buyers is still 3%.