How to use this calculator
- What do you know? Pick “Amount invested” if you know the dollars, or “My shares” if you know your share count.
- Share price: the price you paid or today’s price. With “Amount invested”, it sets how many shares you get.
- Dividend: enter the yearly dividend per share in dollars, or switch to yield if that’s the number you have.
- Payment frequency: how often the company pays. Most US stocks pay quarterly; many REITs and funds pay monthly.
The formula
Shares = Amount invested ÷ Share price
Annual income = Shares × Annual dividend per share
Per payment = Annual income ÷ Payments per year
Yield = Annual dividend per share ÷ Share price × 100
The annual dividend per share is what one share pays over a full year. Companies usually announce one payment at a time, so if you see “$0.50 quarterly”, the annual figure is $0.50 × 4 = $2.00. Payments per year is 12 for monthly, 4 for quarterly, 2 for semi-annual and 1 for annual.
If you entered a yield instead of a dollar amount, the calculator turns it back into dollars first: annual dividend per share = share price × yield ÷ 100.
Worked example
These are the numbers already in the calculator. You invest $10,000 in a stock that trades at $50 and pays $2.00 per share a year, in four quarterly payments.
- Shares: $10,000 ÷ $50 = 200 shares.
- Annual income: 200 × $2.00 = $400.
- Per payment: $400 ÷ 4 = $100.00, paid four times a year.
- Monthly average: $400 ÷ 12 = $33.33.
- Yield: $2.00 ÷ $50 × 100 = 4.00%.
So $10,000 in this stock pays you about $400 a year, as long as the company keeps its dividend where it is.
Yield or dollars per share: which should you enter?
Use dollars per share when you can. It’s the number the company actually declares, and it doesn’t change when the price moves. A yield is always tied to a price: a $2.00 dividend is a 4% yield at $50 but only 3.33% at $60. If you copy a yield from a quote page and use a different share price, your income will be off.
Watch out for “trailing” and “forward” figures too. Trailing yield uses the dividends paid over the past twelve months. Forward yield takes the latest payment and multiplies it by the number of payments in a year. If the company just raised its dividend, the forward number is the better guess for the year ahead.
Why frequency doesn’t change your yearly total
A $2.00 annual dividend is $2.00 whether it arrives as one check or twelve. Frequency only changes the size and timing of each payment. It matters more when you reinvest: money paid monthly goes back to work sooner, which adds a little extra over many years. The DRIP Calculator shows that effect.
Tip: to plan a steady monthly income, mix stocks that pay in different months. Three quarterly payers on staggered schedules (say January, February and March cycles) can cover every month of the year.
What this calculator leaves out
It shows dividends before tax. In a regular brokerage account, US dividends are taxed in the year you receive them, at 0%, 15% or 20% for qualified dividends and at your income tax rate for the rest. Foreign stocks may also have tax withheld at the source. Inside a Roth IRA or other retirement account, you keep the full amount for now.
It also assumes the dividend holds steady for a year. To see what happens when it grows, or when you reinvest it, use the DRIP Calculator. To make sure you buy in time for the next payment, check the ex-dividend date with Will I Get the Dividend?