— Stock Market
Dividend Reinvestment Calculator
Compare reinvesting dividends with taking them as cash. Enter starting shares, dividend yield, growth, price appreciation, tax, fees, and contributions to see the extra value DRIP compounding can create over time.
Value with reinvestment (DRIP)
$29,288.20
- Value taking dividends as cash
- $25,198.09
- DRIP advantage
- $4,090.11
- Total shares accumulated
- 297.77
- Total dividends reinvested
- $6,903.52
- Total return
- 192.88%
Try: $10k, 4% yield, 7% growth, 10 yrs, Net of 15% dividend tax, Reinvest only half, Plus $2k/year contributions
— Year by year — shares, dividends, value
| Year | Shares | Dividends | Shares bought | Value |
|---|---|---|---|---|
| 1 | 208.12 | $406 | 8.12 | $11,134 |
| 2 | 216.57 | $452 | 8.45 | $12,398 |
| 3 | 225.37 | $503 | 8.79 | $13,804 |
| 4 | 234.52 | $561 | 9.15 | $15,370 |
| 5 | 244.04 | $624 | 9.52 | $17,114 |
| 6 | 253.95 | $695 | 9.91 | $19,055 |
| 7 | 264.26 | $774 | 10.31 | $21,217 |
| 8 | 274.99 | $861 | 10.73 | $23,624 |
| 9 | 286.15 | $959 | 11.17 | $26,304 |
| 10 | 297.77 | $1,068 | 11.62 | $29,288 |
— DRIP vs taking dividends as cash
Download— How it works
Each period, dividends (net of tax and fees) buy dividends ÷ price new shares; the price and dividend grow at their rates and the holding compounds forward. The DRIP advantage = the final value reinvesting minus the value of holding flat and taking the dividends as cash.
How a DRIP compounds
A dividend reinvestment plan does something simple but powerful: instead of paying your dividends out as cash, it uses them to buy more shares. Those extra shares pay their own dividends next time, which buy still more shares — a snowball that grows faster the longer it rolls. The calculator runs your holding forward period by period, buying new shares with each dividend (net of any tax and fees) while the price and dividend grow at their rates, and compares the result with simply pocketing the cash.
Worked example — $10,000 at a 4% yield, 7% annual growth, reinvested for 10 years: Reinvesting grows the holding to about $29,300; taking the dividends as cash leaves roughly $25,200. The DRIP advantage — about $4,100 — is purely the compounding of reinvested dividends.
The advantage, and what eats it
The DRIP advantage is the gap between the two paths, and it widens over longer horizons — small early differences compound into large late ones, which is why reinvestment is most powerful for young, long-term investors. Two things shrink it. Tax is the main one: in a taxable account you owe dividend tax even on reinvested dividends, so only the after-tax amount buys shares — a drag the calculator applies. Reinvestment fees do the same on a smaller scale. You can also reinvest only part of the dividend and take the rest as cash, which the “portion reinvested” setting models.
Reading the projection
The table shows your share count climbing each year as dividends buy more, and the chart plots the DRIP value against the take-the-cash value so the widening gap is obvious. Extra annual contributions accelerate both paths. As with every projection here, it assumes steady growth and reinvestment at the prevailing price — real markets are lumpier, and dividends can be cut — so treat it as an illustration of the mechanism, not a forecast. Not investment advice. For the income stream itself, see the Dividend Income calculator.
— Reader questions
What is a DRIP?
A dividend reinvestment plan automatically uses your dividends to buy more shares instead of paying cash. Those extra shares earn their own dividends, compounding your holding over time.
How much better is reinvesting than taking cash?
It depends on yield, growth and time, but the gap compounds. On $10,000 at a 4% yield growing 7% a year, reinvesting for 10 years leaves about $4,100 more than taking the dividends as cash — and far more over longer periods.
Do I pay tax on reinvested dividends?
In a taxable account, usually yes — dividends are taxed whether you take them or reinvest them, so only the after-tax amount buys new shares. That tax drag reduces the DRIP advantage; tax-advantaged accounts avoid it.
Is reinvesting always better than cash?
For growth it usually is, because of compounding — but not if you need the income to live on, or if the stock is in decline. The calculator shows both outcomes so you can weigh growth against the cash you’d forgo.
Can I reinvest only part of my dividends?
Yes — set the portion reinvested below 100%. The rest is treated as cash taken, and the calculator still shows the value of the reinvested part compounding.