Dividend Growth Calculator
Project dividend income as the payout grows each year.
Please note: For information only, not investment advice. Share prices can fall as well as rise and past performance does not predict future results.
What the Dividend Growth Calculator does
Companies that raise their dividend compound your income stream. A 6% annual increase doubles the payout in about 12 years, which is why yield on cost can climb far above the yield available to a new buyer.
Formula
Dividend in year n = Current dividend × (1 + Growth)ⁿAnnual income = Dividend per share × SharesYears to double = ln(2) ÷ ln(1 + Growth)
Inputs explained
| Input | Unit | Required | Notes |
|---|---|---|---|
| Number of shares | number | Yes | Accepts more than 0. |
| Current annual dividend per share | selected currency | Yes | Accepts more than 0. |
| Annual dividend growth rate | % | Yes | — |
| Years to project | number | Yes | Accepts 1 or more, up to 60. |
| Your purchase price per share | selected currency | Optional | Accepts 0 or more. |
| Currency | one of 10 options | Optional | — |
How to use it
- Choose Currency.
- Enter Number of shares, Current annual dividend per share, Annual dividend growth rate and Years to project.
- Optionally add Your purchase price per share.
- Select Calculate.
Worked example
400 shares paying $2.00 a year, growing 7% annually, bought at $50, over 20 years.
- Shares
- 400
- Dividend
- 2.00
- Growth
- 7
- Years
- 20
- Purchase
- 50
The dividend reaches $7.74 a share — $3,096 a year, a 15.5% yield on cost.
Reading the result
- "Income multiple" and "years for the dividend to double" are a useful cross-check on each other — a multiple of roughly 4× implies about two doublings, so they should stay roughly consistent given the same growth rate.
- "Cumulative income received" sums every year along the way, not just the final year's figure — it is the number to use for total cash received over the period, distinct from the ending run-rate.
Assumptions and limitations
- Growth compounds at one constant rate for up to 60 years, with no pause or cut modelled — real dividend growth is uneven and can stop entirely in a downturn, as the notes say.
- Share count is fixed for the whole projection — no further purchases and no reinvestment of the dividend into more shares, so an investor who actually reinvests sees a higher real trajectory than this shows.
Common mistakes
- Comparing "yield on cost" figures across two different purchase prices as if they describe the same opportunity today — yield on cost is specific to your own entry price, not what a new buyer would receive now.
- Assuming this projection and the dividend reinvestment calculator's projection for the same inputs should match — they model different things (income growth alone here, versus income plus share-price growth and reinvestment there), and are not meant to agree.
Frequently asked questions
What growth rate should I assume?
Look at the company's own history over five to ten years, tempered by its payout ratio. A high payout ratio limits how fast the dividend can keep growing.
Are dividend increases guaranteed?
No. Even long-standing dividend growers have cut payouts during recessions. Diversification matters as much for income as for capital.