How your shares, cost and income are worked out
Every dividend you were paid turns into two numbers: the cash that landed, and the shares that cash bought at the price on the day. Those shares then earn the next dividend, which is what makes the holding grow.
- Cash in a period = shares you held × dividend per share (+ any money you added that period)
- Shares bought = cash in that period ÷ price per share that period
- Shares now = shares you started with + shares bought in every period
- Total invested = what you paid at the start + every dividend reinvested + every amount you added
- Average cost per share = total invested ÷ shares now
- Annual dividend income = latest dividend per share × shares now × payments a year
- Yield on cost = (annual dividend income ÷ total invested) × 100
- Market value = shares now × current price; Profit / loss = market value − total invested
The one idea worth holding on to: a reinvested dividend counts as money you paid in. It is cash you earned and then spent on shares, so it goes into the top of that average, not only into the share count.
Worked example: 100 shares at $50, so 5,000.00 paid in. Then two yearly dividends of $1.00 a share. The first is reinvested at $40: 100.0000 × 1.00 = 100.00, which buys 2.5000 shares, so you hold 102.5000. The second is reinvested at $50: 102.5000 × 1.00 = 102.50, which buys 2.0500 shares, so you hold 104.5500. Total invested is 5,000.00 + 100.00 + 102.50 = 5,202.50, and the average cost is 5,202.50 ÷ 104.5500 = 49.760880…, shown as 49.7608. Annual income at $1.00 a share is 104.55, and yield on cost is 104.55 ÷ 5,202.50 × 100 = 2.00%. Type those two rows in and the page returns those figures.
Rounding: every figure on this page is rounded down, never up — the same rule as the rest of the site. Share counts and the average cost are shown to four decimals, amounts to two and percentages to two, so the number you read is never larger than the one that was computed. Each period's shares are worked out from the share count exactly as it is printed at the end of the period before, so the rows and the totals agree with each other.
Why a cheaper reinvestment price moves your average more
The price the dividend is reinvested at decides how much that dividend buys. In the example above, the $100.00 bought 2.5000 shares at $40 but only 2.0500 at $50 — the same money, fewer shares. Periods when the price is low add more shares per dollar, and those cheaper shares pull the average down harder than the dear periods pull it up.
That is why the average cost after a run of reinvestments is usually below the price you started with, and why it is not the plain average of the prices: the weighting is the shares, and the shares came out of the division.
What is counted, and what is not
This page works out what already happened, from the amounts, the dividends per share and the prices you type in. Nothing else goes into the arithmetic. If you want the other side of the same holding — what the shares pay you before anything is put back in — the dividend calculator does that job.
One assumption the arithmetic makes: a regular contribution is treated as buying at the same price as the dividend for the period it falls in — the contribution and that period's dividend are pooled and buy together, at that period's reinvestment price. If your contribution actually went in on a different day or at a different price, give it a period of its own and it will be counted at the price you type there.
- Not counted: commissions and fees, taxes, stock splits and other corporate actions, partial sales, and currency conversion. There is no field for any of them.
- Nothing is run forward. There is no field here for a number of years, a growth rate or an assumed return, and the page does not produce one. Every figure on it comes out of the periods you typed in — that is the whole page.
- No live prices and no dividend lookup. There is no connection to a market data source or a brokerage account, so this page can never show you a price or a dividend it did not get from you. Type them yourself.
- Not built: several tickers at once, saving your history, signing in, or placing an order. There is no account here and nothing is stored.
- Fractional shares are counted in full. If your plan only reinvests whole shares, your own figure will differ from this one.
Amounts are shown in whatever currency you typed; no exchange rate is applied anywhere.
Frequently asked questions
Is a dividend reinvestment calculator the same thing as a DRIP calculator?
Yes — DRIP stands for dividend reinvestment plan, and both names ask for the same arithmetic: dividends paid, the price they went back in at, and the shares, cost and income that come out. This is one page, not two.
How do reinvested dividends change my cost basis?
They raise it, and they raise the share count with it. Each reinvested dividend is treated here the way the cash actually moved: you were paid, and that money bought shares. So the money goes into your total invested and the shares go into your holding, and the average cost per share is the two divided. That is why a long run of reinvestments leaves you with more shares and a cost basis that is not the price you first paid — for how cost basis methods work on the tax side, see the cost basis section on the stock average calculator.
Is there a DRIP cost basis calculator here, or do I work it out myself?
It is on this page, and it is the same two fields as everything else: the dividend per share and the price it was reinvested at, one row per payment. The page keeps the running total for you — the shares each dividend bought, the total invested including every reinvested dividend, and the average cost per share over all of it. You do not have to keep a running tally yourself.
Do I have to enter how many years I have held it?
No, and there is no field for it. You enter the payments you actually received, one row each — two, ten or forty of them. Length of time never enters the arithmetic: what matters is how many payments there were, what each one paid per share, and the price each one went back in at.
How is the annual dividend income worked out?
From the latest row you entered: that period's dividend per share, times the shares you hold now, times how many of those payments happen in a year. Change the yearly/quarterly/monthly setting and the annual figure follows. If your payouts vary, the page uses the most recent one — it is the latest figure you have, not an average.
Can it look up my dividends, or the price they were reinvested at?
No. There is no dividend lookup, no price lookup and no connection to any data source, by design — a fetched figure can be wrong, delayed or for the wrong ticker, and this page would rather show nothing than show a number it did not get from you. Your statements are the source here.
Does it count the tax on the dividends?
No. There is no tax field, so every figure here is before tax. Note that reinvesting a dividend does not by itself settle whether that dividend is taxable — that depends on the account it sits in and the rules that apply to you, and this page works none of it out. Use the figure your broker reports, and a tax professional if it matters.
What if I took some dividends as cash instead of reinvesting them?
Only enter the ones that were reinvested — the rows are the payments that bought shares. If you want the average of purchases you made with new money, the DCA calculator takes amounts and prices, and the stock average calculator takes share counts directly.
Does this page tell me whether I should reinvest my dividends?
No, and nothing here should be read that way. The page does the arithmetic on the payments you enter; it does not compare choices or tell you what to do with your money. It answers one question: given these dividends and these prices, where does my holding stand now?
Does it work on my phone, and do I need an account?
Yes to the first, and no to the second. The fields stack to a single column on a narrow screen and the results stay inside the width of the page. There is no sign-up, no pop-up and nothing to install: the whole calculation runs in your browser, and your numbers are not sent anywhere.