DRIP (Dividend Reinvestment Plan) Calculator

A Dividend Reinvestment Plan, or DRIP, automatically buys more shares of a stock each time it pays a dividend, instead of giving you the cash. Over decades, this turns a static income stream into a snowballing one - more shares pay more dividends next quarter, which buy more shares, and so on.

This calculator projects what happens to a position you start today. Inputs are: the current share count, the share price, the per-payment dividend, the payment frequency (monthly, quarterly, semi-annual, annual), the most recent five-year dividend growth rate (CAGR), and the number of years to project. Internally we use two assumptions you can override: capital appreciation defaults to 8% total return minus the current yield (so a 4%-yielder is assumed to grow its share price at 4% per year), and the dividend growth rate decays from your input toward the long-run market average over years 6 through 15.

Each payment, the model: (1) grows the per-share dividend by the appropriate decayed CAGR; (2) grows the share price by the per-period appreciation; (3) computes the cash dividend = current shares * current per-share dividend; (4) buys fractional shares at the new price; (5) rolls forward.

The output has three numbers. Final shares is your share count after all reinvestment. Final value is shares * projected price. Total dividends is the cumulative cash that flowed through the reinvestment - useful as a sanity check. The relationship final value = final shares * projected price always holds, but the dividend total is reinvested, not pocketed; you do not get to keep both.

Caveats: dividend cuts can and do happen. Companies in distress sometimes cut dividends entirely. Total returns may be negative for long periods. The decay model we use prevents cartoonish results (no stock grows its dividend at 25% per year for 30 years), but you should always pair the projection with a "what if the dividend is cut to zero in year 10" sensitivity check.