Dividend Growth Calculator
See how dividend growth compounds your income over time. A stock that grows its dividend 7% per year doubles your income in about 10 years — without investing another dollar.
Inputs
Income growth over 20 years
3.9x
Your income grows 3.9x over 20 years — without investing another dollar
Monthly Now
$83
Monthly Year 20
$322
Yield on Cost
15.5%
Monthly Dividend Income Growth
Year-by-Year Dividend Growth
| Year | Div/Share | Annual Income | Monthly | Yield on Cost | Cumulative |
|---|---|---|---|---|---|
| Now | $2.00 | $1,000 | $83 | 4.0% | $1,000 |
| 1 | $2.14 | $1,070 | $89 | 4.3% | $2,070 |
| 2 | $2.29 | $1,145 | $95 | 4.6% | $3,215 |
| 3 | $2.45 | $1,225 | $102 | 4.9% | $4,440 |
| 4 | $2.62 | $1,311 | $109 | 5.2% | $5,751 |
| 5 | $2.81 | $1,403 | $117 | 5.6% | $7,153 |
| 6 | $3.00 | $1,501 | $125 | 6.0% | $8,654 |
| 7 | $3.21 | $1,606 | $134 | 6.4% | $10,260 |
| 8 | $3.44 | $1,718 | $143 | 6.9% | $11,978 |
| 9 | $3.68 | $1,838 | $153 | 7.4% | $13,816 |
| 10 | $3.93 | $1,967 | $164 | 7.9% | $15,784 |
| 11 | $4.21 | $2,105 | $175 | 8.4% | $17,888 |
| 12 | $4.50 | $2,252 | $188 | 9.0% | $20,141 |
| 13 | $4.82 | $2,410 | $201 | 9.6% | $22,550 |
| 14 | $5.16 | $2,579 | $215 | 10.3% | $25,129 |
| 15 | $5.52 | $2,759 | $230 | 11.0% | $27,888 |
| 16 | $5.90 | $2,952 | $246 | 11.8% | $30,840 |
| 17 | $6.32 | $3,159 | $263 | 12.6% | $33,999 |
| 18 | $6.76 | $3,380 | $282 | 13.5% | $37,379 |
| 19 | $7.23 | $3,617 | $301 | 14.5% | $40,995 |
| 20 | $7.74 | $3,870 | $322 | 15.5% | $44,865 |
The Power of Dividend Growth
Dividend growth is the annual percentage increase in a company's dividend payment. A company paying $2.00/share this year and $2.14/share next year has a 7% dividend growth rate. Over time, this growth compounds — the same shares you bought years ago pay dramatically more income.
At 7% dividend growth, your income doubles every ~10 years. At 10% growth, it doubles every ~7 years. This is why many long-term investors prioritize dividend growth over high current yield — a 2% yielder growing at 10% will out-earn a 5% yielder growing at 0% within about 10 years, and the gap widens every year after.
Dividend Aristocrats and Growth
The S&P 500 Dividend Aristocrats are companies that have increased their dividend for 25+ consecutive years. This track record demonstrates both the ability and willingness to grow shareholder income through market cycles. Many have averaged 6-10% annual dividend growth rates over decades.
What is a good dividend growth rate?
6-10% annual growth is strong. The Dividend Aristocrats average this range. At 7%, your income doubles every 10 years without additional investment.
Is dividend growth better than high yield?
For 10+ year horizons, dividend growth typically wins. A 2.5% yielder growing at 10% overtakes a 6% yielder with 0% growth in roughly 10 years.
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