Dividend adjusted return calculator
A dividend stock's share price tells only part of the story, because the dividends you collect along the way can add as much as the price change. Enter your shares, buy and end prices, the dividend per share, how fast it grows, your dividend tax rate and how long you held, and this calculator gives your total return with dividends taken as cash and with them reinvested. The year-by-year table shows how the shares and income build up.
Three ways to measure the same holding
What your investment is worth counting only the price, adding dividends as cash, and reinvesting them.
Year by year, with dividends reinvested
The share price, shares owned and dividends each year. Reinvested dividends buy more shares, which then earn dividends of their own.
| Year | Share price | Dividend per share | Dividends after tax | Shares owned | Value |
|---|
How the total return is worked out
The share price is assumed to grow by a steady percentage each year from your buy price to your end price. Dividends are paid once a year, taxed, then either kept as cash or used to buy more shares at that year's price.
Price return
The change in the share price alone.
price return = end price ÷ buy price − 1
Dividend each year
The first-year dividend grown by your growth rate, after tax.
dividend in year y = dividend × (1 + growth)y−1 × (1 − tax)
Cash total return
End value plus all dividends kept as cash.
cash total = (shares × end price + dividends) ÷ cost − 1
Reinvested total return
Each year's dividends buy shares at that year's price; the final value includes the extra shares.
shares += dividends ÷ price that year
Annualised
The yearly rate that compounds to the same result.
annualised = (1 + total)1 ÷ years − 1
Dividend return questions
What is a dividend adjusted return?
It is the return on a stock once dividends are counted, not just the change in its price. A stock that went from $50 to $55 shows a 10 percent price return, but if it also paid $2 a share in dividends each year for five years, the total return is far higher.
What is the difference between price return and total return?
Price return only measures the change in the share price. Total return adds every dividend received. For high-yield stocks and funds, dividends can make up most of the long-run return, so price charts alone can be misleading.
Does reinvesting dividends make a big difference?
Over long periods, yes. Each reinvested dividend buys more shares, which pay their own dividends, so the effect compounds. Over 10 or 20 years, the gap between taking cash and reinvesting can be large, as the comparison bars show.
How is dividend tax handled?
Dividends in a regular taxable account are usually taxed in the year they are paid, even if you reinvest them. The calculator takes your dividend tax rate off each payment before it is reinvested or counted. Set it to zero for tax-advantaged accounts.
What is dividend growth?
Many companies raise their dividend over time. A 5 percent yearly increase doubles the payout in about 14 years. The calculator grows the dividend per share each year by the rate you enter.
How does the calculator price reinvested shares?
It assumes the share price moves smoothly from your buy price to your end price, growing by the same percentage each year, and reinvests each year's dividends at that year's price. Real prices jump around, so treat the result as an estimate.