How to use this calculator
Pick a mode first.
- Project a dividend: enter today’s yearly dividend per share, the growth rate you expect, how many years ahead to look, and how many shares you own.
- Find growth rate: enter a past yearly dividend, a later one, and the number of years between them. You’ll get the steady yearly rate that connects them.
Use full-year dividends in both modes. If a company pays $0.50 a quarter, its annual dividend is $2.00. Mixing a quarterly figure with an annual one will make the growth look far off.
The formula
Dividend in year N = Current dividend × (1 + g)N
Total collected = Sum of the dividends in years 1 to N
Growth rate (CAGR) = (Ending ÷ Starting)1 ÷ Years − 1
Rule of 72: Years to double ≈ 72 ÷ g (in percent)
Exact: Years to double = ln 2 ÷ ln(1 + g)
Here g is the yearly growth rate as a decimal (7% = 0.07). Year 1 already includes one raise: the dividend you collect next year is today’s dividend × (1 + g). The total collected adds up years 1 through N and leaves out the current year, which you are already being paid.
Worked example
The starting numbers: a stock pays $2.00 per share a year, you expect it to grow 7% a year, you own 100 shares, and you look 10 years ahead.
- Year 1: $2.00 × 1.07 = $2.14 per share.
- Year 10: $2.00 × 1.0710 = $3.93 per share, or $393.43 a year on 100 shares.
- Adding years 1 through 10 gives $29.57 per share, or $2,956.72 on your shares.
- Doubling time: 72 ÷ 7 ≈ 10.3 years by the Rule of 72; the exact answer is 10.2 years.
Now the other direction. Say a dividend was $1.00 ten years ago and is $1.97 today. ($1.97 ÷ $1.00)1/10 − 1 = 7.02% a year. Switch to “Find growth rate” to check it.
Why compound growth beats a simple average
Companies rarely raise by the same amount every year. One year it might be 10%, the next 3%. Averaging those raises overstates the real growth, because a percentage gain followed by a smaller one doesn’t add up the way it looks. CAGR answers a cleaner question: what single yearly rate turns the starting dividend into the ending one? That is the number to use when you project forward.
Pick your years with care. Starting the count right after a dividend cut makes growth look stronger than it was; starting just before a big one-time raise does the same. Looking at five and ten years separately often tells you more than one long stretch.
Growth vs a higher yield today
A stock paying less today but growing faster can overtake one that pays more now. A $2.00 dividend growing 7% reaches about $3.93 in ten years, while a $3.00 dividend growing 2% only reaches about $3.66. How long you plan to hold decides which matters more. To see what a growing dividend does to the yield on what you paid, try the Yield on Cost Calculator.
Where to find the numbers
A company’s investor relations page usually lists every dividend it has paid. Add up the payments in one year to get that year’s annual dividend, then do the same for a year five or ten years earlier and use “Find growth rate”. Use full years, and leave out one-time special dividends, or the rate will look higher than the regular dividend really grew.
Tip: compare the growth rate with inflation. If prices rise 3% a year and your dividend grows 3%, your income buys the same amount every year. Anything above inflation is a real raise.
To combine dividend growth with reinvesting and new contributions, use the DRIP Calculator or the Compound Dividend Calculator.