Dividend calculator
A dividend that grows every year turns a modest starting yield into something else entirely after fifteen years. This shows both the first cheque and the last one.
Dividend
- Dividend in year one
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- Dividend in the final year
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- Paid out in total
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- Yield on your original money
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How to use it
Enter the capital invested, the dividend yield you get on it today and the pace at which you expect the payment to grow. The growth rate is the one companies raise their dividend by, not the share price move.
An example
Anke holds 50,000 euro at a 3.5 percent yield, so 1,750 euro in the first year. With 5 percent dividend growth the payment reaches 3,465 euro in year 15 and the fifteen years together bring roughly 37,800 euro. Measured on her original 50,000, the last payment is a yield of 6.9 percent.
What the result leaves out
Dividends are decided every year and can be cut. Steady growth over fifteen years is the good case, not the base case, and a high starting yield is often the market saying it does not believe the payment.
Questions people ask
It measures this year’s dividend against what you paid, not against today’s price. Hold long enough through rising payments and it climbs well past the yield anyone buying today can get.
No. This shows the income as it arrives, so you can see what the portfolio pays out. Reinvesting it is what the compound interest calculator does.
Often the opposite. Yield rises when the price falls, so the highest yields on a screen usually belong to companies the market expects to cut.