How do you calculate reinvested dividends?

Each time a dividend is paid, it buys more shares: new shares = (shares × dividend per share) ÷ share price. The next dividend is paid on the larger number of shares, and that is how a DRIP compounds. This calculator runs that loop with the company's real dividends and your growth inputs.

A dividend reinvestment plan uses each dividend to buy more shares of the same stock, often fractional shares and with no fee, instead of paying cash. Over time the new shares earn dividends too, so income and share count grow together.

What are the risks of a DRIP?

There are three. You keep adding to one stock, so your portfolio becomes less spread out. You buy at any price, even when the stock is expensive. And reinvested dividends are still taxed, and each purchase is a new tax lot to track.

How much do I need to invest to make $2,000 a month in dividends?

You need $24,000 a year. That is about $800,000 at a 3% yield, or $600,000 at 4%. Reinvesting on the way shortens the path: at a 3% yield with 7% dividend growth, the income roughly doubles every 7–8 years without new money.

Should I reinvest dividends or take the cash?

Reinvest when you want long-term growth and the company still deserves more of your money. Take the cash when you need the income or want to invest it elsewhere. This calculator shows both paths side by side. The gap grows with time and with dividend growth.

Free tool

Dividend Reinvestment Plan (DRIP) Calculator

One position, run twice: with dividends reinvested and with dividends taken as cash.

Try:

The Coca-Cola Company (KO)Yield 2.77% · payout history to 2026-07-03

Your investment

Years

Portfolio value after 20 years with dividends reinvested

$44,368

Reinvestment accounts for 21% of the ending value over 20 years. That gap is pure compounding rather than extra money you put in.

Without reinvesting: $35,052
DRIP advantage: $9,316
Income in year 20: $1,007

Reinvested (DRIP)Dividends as cash

Adjust the payout data & assumptions

Payout data — from its history, to 2026-07-03

Share price

Annual dividend per share

Dividend growthDefault: its recent growth

%/yr

Your assumptions

Share price growth

%/yr

Monthly contribution

How to compare DRIP with taking the cash

Type a dividend stock and select Compare DRIP. Its payout history fills in.
Set the amount and the number of years. Both results show on the chart.
Read the gap between the two lines. That gap is what reinvesting adds.
The note under the result shows how much of the final value comes from compounding.
Try 10 years, then 30. The gap grows with time.

Both results use the same inputs. Only reinvestment changes. Before tax and hypothetical.

How this was calculated

Each year, with reinvestment: new shares = (shares × DPS) ÷ price. Without it, the dividends build up as cash.

Both cases start with the same investment and contributions. The dividend per share grows at your rate, and the share price at your price-growth rate. Reinvested dividends buy shares at each year's projected price, and those shares earn dividends the next year. That loop is the DRIP effect. The cash case is valued as shares × price plus the cash collected.

Projections are hypothetical, before tax and not investment advice.

How a DRIP works

With a DRIP, each dividend buys more shares, often fractional ones, at the current price. Those new shares earn dividends too, so the number of shares grows every year without new money.

Reinvested dividends are still taxed in the year they are paid, unless they are in an account such as an IRA or 401(k). A DRIP works best with companies that raise their dividend steadily. A high yield that gets cut stops the compounding. To see the income as cash, use the dividend calculator.

Try it with a real dividend stock

Each one opens with that company's payout history.

MonkScore

How does your stock score?

MonkScore™ rates a company from 0 to 100 on five things at the same time. The scores are inside MonkStreet.

How this score is made Disclaimer

Growth (value available with a MonkStreet trial)
Profitability (value available with a MonkStreet trial)
Quality (value available with a MonkStreet trial)
Conviction (value available with a MonkStreet trial)
Safety (value available with a MonkStreet trial)

Show me the MonkScore14-day free trial

Questions

Each time a dividend is paid, it buys more shares: new shares = (shares × dividend per share) ÷ share price. The next dividend is paid on the larger number of shares, and that is how a DRIP compounds. This calculator runs that loop with the company's real dividends and your growth inputs.
A dividend reinvestment plan uses each dividend to buy more shares of the same stock, often fractional shares and with no fee, instead of paying cash. Over time the new shares earn dividends too, so income and share count grow together.
There are three. You keep adding to one stock, so your portfolio becomes less spread out. You buy at any price, even when the stock is expensive. And reinvested dividends are still taxed, and each purchase is a new tax lot to track.
You need $24,000 a year. That is about $800,000 at a 3% yield, or $600,000 at 4%. Reinvesting on the way shortens the path: at a 3% yield with 7% dividend growth, the income roughly doubles every 7–8 years without new money.
Reinvest when you want long-term growth and the company still deserves more of your money. Take the cash when you need the income or want to invest it elsewhere. This calculator shows both paths side by side. The gap grows with time and with dividend growth.