Enter the current dividend income, the number of years invested, and the growth rate into the calculator. The calculator will display the dividend income after the number of years entered.
Dividend Growth Formula
The following formula is used to calculate the dividend income from the growth rate.
D = CDI * (1 + r/100) ^ n
- Where D is the future dividend income
- CDI is the current dividend income
- r is the annual growth rate (as a percentage)
- n is the number of years
To project dividend income with a constant annual growth rate, multiply the current dividend income by (1 + r/100) raised to the power of the number of years.
Dividend Growth Definition
Dividend growth is the increase in dividend payments (or total dividend income) over a period of time.
How to calculate dividend growth?
How to calculate dividend income
- First, determine the current dividend income
This will be your total annual dividend income from your investments.
- Next, determine the yearly growth rate of the investment
If dividend payments grow at a steady rate (or if the dividend yield stays roughly constant), dividend income may increase over time, but dividends and yields are not guaranteed.
- Determine the total years you plan to invest
This will be the total number of years of investment.
- Calculate the future value
Calculate the future dividend income.
FAQ
A dividend is a distribution of cash (or sometimes additional shares) paid by a company or fund to shareholders. Dividends are often paid quarterly, but they can also be paid monthly, semiannually, annually, or irregularly, and they are not guaranteed.
Dividend yields vary widely by company, sector, and market conditions. Many established dividend-paying stocks yield around 1–4%, while higher-yield securities can be 5%+ (sometimes much higher), often with higher risk. Yields can change over time.
