Model long-term portfolio growth with automatic dividend reinvestment, share accumulation, and compounding yield projections.
DRIP Calculator estimates portfolio growth when each dividend payment purchases additional shares instead of remaining as cash. It follows the growing share balance across the selected investment period and reports the resulting accumulation and projected value under the entered dividend and price assumptions. The important distinction is that reinvestment compounds the number of shares, not a guaranteed rate of return. Actual dividends can change, and the price available when each payment is reinvested affects how many shares it buys.
A concrete input and expected output from the current implementation.
Input
Starting shares: 10 Share price: $100 Annual dividend yield: 4% Dividend frequency: annually Share-price growth: 0% Term: 1 year
Expected output
Dividend reinvested: $40.00 Additional shares: 0.4000 Ending shares: 10.4000 Ending portfolio value: $1,040.00
Ten $100 shares produce a $40 annual dividend at a 4% yield. Reinvesting $40 at the unchanged $100 price buys 0.4 share, leaving 10.4 shares worth $1,040.
For each dividend date, the projected cash distribution equals the shares then held multiplied by the assumed dividend per share for that period. Dividing that distribution by the assumed reinvestment price gives the additional shares. Those fractional or whole shares join the existing balance and can generate dividends during later periods.
The projection repeats dividend purchases over the chosen term, applying the entered assumptions about payment frequency and share-price movement. Ending portfolio value is the accumulated share count multiplied by the projected share price. Dividend growth and price growth are different assumptions: a rising share price alone does not necessarily mean the company pays a larger dividend.
No. Reinvestment can compound the share count because newly purchased shares may receive later dividends, but neither the dividend nor the share price is guaranteed. A dividend reduction, suspension, or falling market price can make the realized outcome materially different from the projection, including an ending value below the amount invested.
No. Dividend yield relates a dividend amount to a share price, while total return also reflects changes in the share price and the treatment of distributions. The calculator models results from its entered assumptions, but its ending value should not be read as a guaranteed total return or as proof that reinvestment is preferable to receiving cash.
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