Use our free dividend growth rate calculator to track actual dividend payments over time and measure how fast your income is compounding. Enter your per-share dividends by quarter, half-year, or year — and instantly see your compound annual growth rate (CAGR), yield on cost, and a 5-year income projection.
Dividend Growth Rate Calculator
Track actual dividend payments over time. See your real growth rate.
Setup
Dividend Payments Per Share
Enter the dividend amount per share for each period.
For informational purposes only. Projections assume historical growth continues. Past performance does not guarantee future results.
What Is Dividend Growth Rate?
The dividend growth rate measures how much a company’s dividend payment increases from one period to the next, expressed as a percentage. It’s one of the most important metrics for income investors because it tells you how fast your passive income is actually compounding — not just what the stock price is doing.
A stock yielding 3% today might not seem exciting next to one yielding 7%. But if that 3% grower is increasing its dividend at 12% per year, it will generate significantly more income over a 10-year hold than the high yielder growing at 2-3%. Dividend growth rate is what separates a stagnant income stream from one that builds real wealth.
How to Calculate Dividend Growth Rate (CAGR)
The most reliable way to measure dividend growth is the compound annual growth rate, or CAGR. This smooths out year-to-year fluctuations and gives you the true annualized rate of increase across your full holding period.
The formula is:
CAGR = (Ending Dividend ÷ Beginning Dividend) ^ (1 ÷ Number of Years) − 1
For example, if a stock paid $2.00 per share in annual dividends five years ago and pays $3.25 today, the dividend growth CAGR is:
($3.25 ÷ $2.00) ^ (1 ÷ 5) − 1 = 10.2% per year
That single number tells you the dividend has been compounding at roughly 10% annually — a rate that would double your income stream in about seven years.
Understanding Yield on Cost
Yield on cost (YOC) measures your current annual dividend income as a percentage of what you originally paid for the shares — not the current market price. This is the metric that reveals the true power of dividend growth investing over time.
The formula is straightforward:
Yield on Cost = Current Annual Dividend Per Share ÷ Original Cost Per Share × 100
If you bought shares at $50 and the stock now pays $4.00 per year in dividends, your yield on cost is 8% — even if the stock’s current market yield is only 3%. That gap between market yield and your personal yield on cost is the compounding reward for holding quality dividend growers over long periods.
How to Use This Calculator
Start by selecting how often your stock or ETF pays dividends — most pay quarterly, but some pay semi-annually or annually. Set your year range to cover the full period you want to analyze, then enter the actual per-share dividend amounts for each period. The calculator will automatically compute your annual totals, year-over-year growth for each year, and your overall CAGR.
For a more complete picture, enter your cost basis per share to see your yield on cost, and the current share price to see the stock’s current yield. The 5-year projection uses your historical CAGR to estimate where your dividend income could be headed if growth continues at the same pace.
Frequently Asked Questions
A dividend growth rate of 6-10% annually is generally considered strong for established companies. Rates above 10% are excellent but may be harder to sustain long-term. The S&P 500’s dividend has historically grown at roughly 5-6% per year. Dividend Aristocrats — companies with 25+ consecutive years of increases — typically deliver 7-10% growth, which is why they’re popular with income investors.
For investors with a time horizon of five years or longer, dividend growth rate is arguably more important than starting yield. A 3% yield growing at 12% per year will produce more total income over a decade than a 6% yield growing at 2%. The crossover point depends on the exact numbers, but for most long-term holders, growth wins.
A simple average adds up each year’s growth rate and divides by the number of years. CAGR accounts for compounding, which makes it more accurate over multi-year periods. If a dividend grows 20% one year and falls 10% the next, the simple average is 5% — but the CAGR is only 3.9%. CAGR reflects what actually happened to your money.
Your brokerage account’s transaction history is the most reliable source for dividends you’ve actually received. For researching new stocks, sites like Seeking Alpha, Nasdaq.com, and your brokerage’s research tools all publish dividend payment histories. Most ETF providers also publish full distribution histories on their fund pages.
Additional Dividend Calculators
- Dividend Growth Calculator – Project your dividend income growth with reinvestment, contributions, and inflation.
- Dividend Yield Calculator – Find out what percentage return you earn from dividends or find the dividend needed to achieve a target yield.
