What is a dividend?
A share of a company's profit paid out to shareholders, usually as cash. How much you receive depends on how many shares you hold and the dividend yield — the annual dividend expressed as a percentage of the share price.
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Dividend Calculator
Annual dividend income, and the reinvested value over time when DRIP is enabled.
Annual dividend = Shares × Price × (Yield% / 100)
Frequently asked questions
How is the annual dividend worked out?
Multiply the number of shares by the share price to get the amount invested, then multiply by the yield as a decimal. 500 shares at $20 with a 4% yield pays 500 × 20 × 0.04 = $400 a year.
What is dividend reinvestment (DRIP)?
Instead of taking the cash, you use each dividend to buy more shares automatically. Those extra shares then pay dividends of their own, so your income and holding grow on themselves — the same compounding effect that powers long-term wealth.
How do I read the chart?
With reinvestment switched off, the bars show the same dividend income each year — a flat, steady stream. Switch DRIP on and the line curves upward instead, because each year's reinvested dividends enlarge the holding that pays the next dividend.
Where is this used in real life?
Income investing — a retiree living off $400 a year per $10,000 of holdings at a 4% yield. Long-term growth — reinvesting dividends in an index fund so the position compounds for decades. Comparing stocks — using yield to judge which pays more income per dollar invested. Note this is a simplified model that assumes the share price holds steady.