DRIP Calculator (Dividend Reinvestment)
See what reinvesting dividends does to your portfolio and income over time. Load any stock or ETF to prefill its live price, dividend and five-year growth (FAF is loaded, data as of Sep 29, 2026), then set your contributions, how much to reinvest, your account type, fees and inflation. Every scenario gets a year-by-year table, a DRIP-versus-cash chart, a CSV download and a shareable link.
FAF First American Financial Corporation
$64.72 · $2.44/yr dividend · 3.68% yield · quarterly
Portfolio value, year 20
$312,713
Annual dividend income, year 20
$13,731
$1,144 a month
Yield on cost
10.56%
Final income ÷ money put in
Total contributed
$130,000
Total dividends received
$105,693
Extra value from DRIP
$52,869
vs. taking dividends as cash
Reinvesting vs. taking cash
Portfolio value by year. Cash dividends are counted in the no-DRIP line.
Annual dividend income by year
Gross, before tax
Year-by-year table
| Year | Contributed | Dividends | Shares | Share price | Value | Annual income | Yield on cost |
|---|---|---|---|---|---|---|---|
| 1 | $16,000 | $524 | 253.8 | $66.75 | $16,945 | $619 | 3.87% |
| 2 | $22,000 | $797 | 354.2 | $68.85 | $24,384 | $900 | 4.09% |
| 3 | $28,000 | $1,095 | 455.7 | $71.01 | $32,358 | $1,206 | 4.31% |
| 4 | $34,000 | $1,419 | 558.6 | $73.24 | $40,911 | $1,539 | 4.53% |
| 5 | $40,000 | $1,773 | 663.1 | $75.54 | $50,090 | $1,903 | 4.76% |
| 6 | $46,000 | $2,159 | 769.4 | $77.91 | $59,948 | $2,300 | 5.00% |
| 7 | $52,000 | $2,580 | 877.8 | $80.36 | $70,542 | $2,732 | 5.25% |
| 8 | $58,000 | $3,039 | 988.6 | $82.88 | $81,932 | $3,204 | 5.52% |
| 9 | $64,000 | $3,540 | 1101.8 | $85.48 | $94,187 | $3,719 | 5.81% |
| 10 | $70,000 | $4,087 | 1217.9 | $88.17 | $107,380 | $4,281 | 6.12% |
| 11 | $76,000 | $4,683 | 1337.1 | $90.94 | $121,590 | $4,895 | 6.44% |
| 12 | $82,000 | $5,334 | 1459.7 | $93.79 | $136,905 | $5,565 | 6.79% |
| 13 | $88,000 | $6,045 | 1586.0 | $96.74 | $153,420 | $6,296 | 7.15% |
| 14 | $94,000 | $6,822 | 1716.3 | $99.77 | $171,239 | $7,096 | 7.55% |
| 15 | $100,000 | $7,670 | 1851.0 | $102.91 | $190,477 | $7,970 | 7.97% |
| 16 | $106,000 | $8,598 | 1990.4 | $106.14 | $211,256 | $8,925 | 8.42% |
| 17 | $112,000 | $9,612 | 2134.9 | $109.47 | $233,713 | $9,969 | 8.90% |
| 18 | $118,000 | $10,720 | 2285.0 | $112.91 | $257,998 | $11,112 | 9.42% |
| 19 | $124,000 | $11,934 | 2441.1 | $116.45 | $284,272 | $12,362 | 9.97% |
| 20 | $130,000 | $13,261 | 2603.5 | $120.11 | $312,713 | $13,731 | 10.56% |
Projection, not a forecast: it assumes the growth rates above hold every year. Dividends are paid on the chosen schedule and reinvested at that month's price; raises apply once a year. See today's income and payment calendar →
Example: $10,000 in FAF plus $500 a month
Starting with $10,000 in First American Financial Corporation (FAF) at $65 a share, adding $500 a month and reinvesting every dividend, with dividends growing 4.14% and the share price 3.14% a year (from its recent averages, capped for a long horizon), the projection after 20 years is a portfolio of $312,713 paying $13,731 a year in dividends, from $130,000 of contributions. Taking the dividends as cash instead ends at $259,844, including the cash collected.
| Years | Contributed | Value with DRIP | Value taking cash | Annual income (DRIP) | Yield on cost |
|---|---|---|---|---|---|
| 10 | $70,000 | $107,380 | $102,031 | $4,281 | 6.12% |
| 20 | $130,000 | $312,713 | $259,844 | $13,731 | 10.56% |
| 30 | $190,000 | $770,403 | $515,684 | $37,253 | 19.61% |
Projection only: assumes constant growth and no dividend cuts. Change any assumption in the calculator above.
How dividend reinvestment compounds
Each payment date, the dividend buys more shares at that day's price. The calculator steps through every month of the plan:
Dividend received = shares owned × (annual dividend per share ÷ payments per year)
New shares = dividend × (1 − tax rate) × reinvest % ÷ share price that month
Yield on cost = annual dividend income ÷ total money you put in
Contributions buy shares on their own schedule, the share price grows a little each month, and the dividend per share is raised once a year, the way most companies raise theirs. Fund fees are taken monthly from the share count, and inflation converts future values into today's dollars.
DRIP vs. taking dividends as cash
Reinvesting wins on long horizons because the extra shares compound: the gap in the table above widens every decade. Taking cash wins if you need the income now, if the position is already a large part of your portfolio, or if you would rather put the cash into a better-valued stock. A partial DRIP (for example 50%) is a common middle path in early retirement.
Taxes on reinvested dividends
Reinvesting does not defer tax. In a taxable U.S. account, reinvested dividends are taxed in the year they are paid (0%, 15% or 20% for qualified dividends, ordinary income rates otherwise), and each purchase adds a tax lot with its own cost basis. Holding dividend payers in an IRA, Roth IRA or 401(k) lets every reinvested dollar compound untaxed. Set the account type in the calculator to see the difference.
Choosing realistic assumptions
- Dividend growth: we prefill the ticker's 5-year average, capped at 8%. Check its dividend history for raises and cuts.
- Price growth: prefilled from the 5-year price return, but kept within one point of dividend growth. If the dividend grows much faster than the price for decades, the implied yield climbs to levels stocks rarely sustain; the calculator warns you when that happens.
- Safety: a reinvestment plan built on a dividend that gets cut stalls. Every ticker shows its dividend safety grade.
- Timing: to receive a payment you need to own shares before the ex-dividend date.
Dividend market facts
Data as of · Source: SmarterDividends data
- As of Sep 29, 2026, the median forward dividend yield among U.S.-listed dividend-paying stocks with a market value of at least $500 million is 2.64%.
- As of Sep 29, 2026, 106 U.S.-listed stocks in SmarterDividends' data have raised their dividend for 25 or more consecutive years.
- In the 30 days to Sep 29, 2026, 88 U.S.-listed companies raised their regular dividend and 4 cut it, by ex-dividend date. That is 22.0 increases for every cut.
Cite this page
SmarterDividends, "DRIP Calculator," updated Sep 29, 2026, https://smarterdividends.com/calculators/drip-calculator
Frequently asked questions
What is a DRIP calculator?
A DRIP (dividend reinvestment plan) calculator projects how a position grows when every dividend is used to buy more shares. Those new shares earn dividends of their own, so income and share count compound. This one also models regular contributions, dividend and price growth, partial reinvestment, taxes, fund fees and inflation.
How does dividend reinvestment work?
On each payment date your broker (or the company's own plan) uses the cash dividend to buy more shares, usually including fractional shares, at that day's price. Next quarter you own slightly more shares, so the dividend is slightly larger, and it buys slightly more again.
Is it better to reinvest dividends or take cash?
If you don't need the income yet, reinvesting usually produces a much larger portfolio and income stream over long periods, as the chart above shows. If you live on the income, or a position is already too large, taking cash and investing it elsewhere can make more sense. The calculator's 'Take cash' and partial options show the trade-off.
Are reinvested dividends taxed?
Yes, in a taxable U.S. account. Reinvested dividends are taxable in the year they are paid, exactly as if you had received cash. Each reinvestment also creates a new tax lot with its own cost basis. Inside an IRA, Roth IRA or 401(k) they are not taxed when paid. Choose your account type in the calculator to see the effect.
Does DRIP buy fractional shares?
Most U.S. brokers' DRIP programs reinvest into fractional shares, so every cent of the dividend goes back to work. The calculator assumes fractional shares.
How accurate is a DRIP calculator?
It is a projection, not a forecast. It assumes the dividend and share price grow at constant rates. Real dividends can be cut and prices fall. We prefill each ticker's actual five-year dividend and price growth as a starting point, capped to a planning range (dividend growth at 8%, price growth kept near dividend growth); test lower rates to stress-test the plan.
What dividend growth rate should I use?
Use the stock's own history as a guide, then be conservative. Established dividend growers have often raised payouts 4% to 8% a year; high-yield REITs and utilities often grow 2% to 4%. For FAF we prefill its 5-year average (4.1% a year as of Sep 29, 2026).
Should I reinvest dividends in retirement?
Many retirees switch reinvestment off so the dividends pay living costs, while keeping it on in accounts they won't touch for years. The partial-reinvestment setting (for example 50%) shows a middle path: part of the income is spent and part keeps compounding.
For education and planning only, not investment, tax or legal advice. Projections assume constant growth rates; real dividends, prices and tax rules change.