Dividend Reinvestment (DRIP) Calculator
$
$
5%
6%
20
Portfolio Value (DRIP)$31,622.81
Final Shares197.20
Total Dividends Reinvested$9,915.77
Value Without DRIP$22,648.87
DRIP Advantage$8,973.95
The Dividend Reinvestment (DRIP) Calculator simulates what happens when every dividend is plowed back into buying more shares instead of being taken as cash. Year after year a growing share count earns a growing dividend, and a rising share price lifts the whole portfolio, so the results compound. The tool also shows how much extra a DRIP earns versus pocketing the dividends.
Formula
sharesNext = shares + (shares × dividend) / price; price and dividend each grow by their annual rate
- shares
- Shares held at the start of the year
- dividend
- Dividend per share paid that year
- price
- Year-end share price used to buy new shares
How it works
- Enter your starting shares, the current price, and the annual dividend per share, then set expected yearly dividend growth, share-price growth, and a holding period.
- Each simulated year the share price appreciates, dividends are paid on the shares held, and those dividends immediately buy more shares at the year-end price.
- The calculator compares the reinvested portfolio against one where dividends are taken as cash, reporting the final share count, portfolio value, and the DRIP advantage.
Worked example
100 shares at $50, a $2 dividend, 5% dividend growth, 6% price growth, over 10 years.
- Each year the price and dividend grow while reinvested dividends add fractional shares.
- After 10 years the share count compounds to about 142.67 shares.
- Total dividends reinvested come to roughly $3,017.94.
Portfolio of about $12,774.72 versus $11,469.82 without reinvesting, a DRIP advantage near $1,304.91.
Frequently asked questions
- How does a DRIP actually grow my returns?
- Reinvested dividends buy additional shares, and those new shares then earn dividends of their own. This compounding, combined with share-price appreciation, can meaningfully outpace taking the same dividends in cash over long periods.
- Does this calculator account for taxes?
- No. In a taxable account dividends are usually taxed in the year they are paid even when reinvested. The projection assumes a tax-advantaged account or that taxes are paid from outside funds.
- Why does the model buy fractional shares?
- Many real DRIP programs and brokerages allow fractional share purchases, so the simulation reinvests the full dividend each year rather than leaving leftover cash, which keeps the compounding precise.