Dividend adjusted return calculator
Looking only at the share price misses half of what a dividend stock pays, since the dividends collected along the way can match the price gain. Enter shares, buy and end prices, dividend per share and its growth, your dividend tax rate and the holding period, and the calculator gives the total return with dividends taken as cash and with them reinvested. A yearly table shows how the share count and income grow over time.
One holding, three ways to measure it
The value of your investment on price alone, with dividends kept as cash, and with them reinvested.
Each year with dividends reinvested
Share price, shares held and dividends every year. Reinvested dividends buy extra shares, and those shares pay dividends too.
| Year | Share price | Dividend per share | Dividends after tax | Shares owned | Value |
|---|
How total return is calculated
The share price is assumed to rise or fall by the same percentage every year between your buy and end prices. Dividends arrive once a year, are taxed, and then either stay as cash or buy more shares at that year's price.
Price return
The change in share price on its own.
price return = end price ÷ buy price − 1
Each year's dividend
The first-year dividend increased by your growth rate, after tax.
dividend in year y = dividend × (1 + growth)y−1 × (1 − tax)
Total return with cash dividends
Final value plus every dividend kept as cash.
cash total = (shares × end price + dividends) ÷ cost − 1
Total return with reinvestment
Every year's dividends buy shares at that year's price, and the final value includes the extra shares.
shares += dividends ÷ price that year
Annualised return
The yearly rate that compounds to the same total.
annualised = (1 + total)1 ÷ years − 1
Dividend return FAQ
What is a dividend adjusted return?
The return on a stock with dividends counted, not just the price change. A stock that went from $50 to $55 shows a 10 percent price return, but if it paid $2 a share every year for five years, the full return is much higher.
How do price return and total return differ?
Price return covers only the move in the share price; total return adds every dividend received. For high-yield stocks and funds, dividends can be most of the long-run return, so a price chart alone can mislead.
How much does reinvesting dividends add?
Over long periods, a lot. Every reinvested dividend buys shares that pay their own dividends, so the effect snowballs. Across 10 or 20 years the gap between cash and reinvestment can be large, as the comparison bars show.
How does the calculator handle dividend tax?
In an ordinary taxable account, dividends are usually taxed in the year they are paid, even when reinvested. Your dividend tax rate comes off each payment before it is reinvested or counted. Use zero for tax-advantaged accounts.
What is dividend growth?
Many companies raise their dividend over time, and a 5 percent annual rise doubles the payout in about 14 years. The calculator increases the dividend per share each year by the rate you enter.
At what price are dividends reinvested?
The model assumes the price moves smoothly from buy to end price at the same percentage each year, and reinvests each year's dividends at that year's price. Real share prices are far bumpier, so read the result as an estimate.