Dividend Yield Calculator 2025 – Stock Income & DRIP

Introduction

Dividend-paying stocks provide passive income while you hold them. A Dividend Yield Calculator helps you estimate annual income and compare stocks based on their yield.

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Key Metrics

Dividend Yield

Formula: (Annual Dividend per Share / Stock Price) × 100

Example:

• Stock Price: $100
• Annual Dividend: $4
• Dividend Yield: 4%

Dividend Income

Formula: Number of Shares × Annual Dividend per Share

Example: 100 shares × $4 = $400/year

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Dividend Reinvestment (DRIP)

Instead of taking cash, you can reinvest dividends to buy more shares, compounding your returns.

Example:

• Start: 100 shares @ $100 each
• Yield: 4%
• Year 1 Dividend: $400 → Buys 4 more shares
• Year 2: You own 104 shares, earning $416
• After 20 years at 4% yield + 6% price growth: You'd have ~230 shares worth ~$73,000

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High Yield vs. Sustainable Yield

• Yield \u003e 8%: Often unsustainable or a distressed company.
• Yield 2-5%: Typical for stable, mature companies.
• Yield \u003c 1%: Growth stocks that reinvest profits.

Tip: Look for dividend growth, not just high yield. A company raising dividends annually is healthier than one with a stagnant 8% yield.

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FAQ

Q: Are dividends guaranteed? A: No. Companies can cut or suspend dividends during downturns.

Q: How are dividends taxed? A: Qualified dividends are taxed at 0%, 15%, or 20% (capital gains rates), which is better than ordinary income.

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Related Tools

• Investment Return Calculator: /calculator/05-investment-return-calculator

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Conclusion

Dividend stocks are the backbone of passive income portfolios. Use the Dividend Yield Calculator to find consistent, reliable income generators.