The dividend reinvestment calculator helps the investors to watch out for the portfolio growth of their investment. The rate of dividends is calculated by multiplying the recent dividends by the number of dividends per period. You can use the calculator below:
How to use a Dividend Reinvestment Calculator?
Here are a few major steps to use the Dividend Reinvestment Calculator
- Step 1: Add the Money invested. Here this step helps you to choose how much money you want to invest in a stock that pays you a dividend.
- Step 2: Add the required rate of return. This part of the tool helps you to know how you can plan on reinvestment as a part of a dividend reinvestment plan (DRIP) which is the easiest way to get more profit.
- Step 3: Add the number of years you want to stay invested in a stock.
- Step 4: Get Information about the stock Dividend reinvestment plan for monthly, quarterly, and yearly reinvestment plan
A person always wants to calculate the money easily and likes the calculator which can help to understand the currency more thoroughly, for that dividend reinvestment calculator does a great job. The dividend reinvestment calculator helps the investors to watch out for the portfolio growth of their investment. It is not just you have to select the right dividend stock for the portfolio, it is also very necessary to keep a good check and track of that portfolio. This will help the investor to see how they are performing currently and how they will perform in the future based on the selection of variables. Numerous analytical tools help to calculate the dividend yield simply. The latest tool in the dividend reinvestment calculator is the MarketBeat calculator dividend. It asked you to give the basic information which is already available on the stock page of equity’s individual on MarketBeat. It also asked for a few assumptions from your end which can be answered easily by seeing the company’s recent earnings report which helps to keep the record easily and gives a clear direction for future investments.
What can a Dividend Reinvestment Calculator do for you?
The dividend reinvestment calculator is something that can make life so easy, it can give you as accurate results as accurate data you provide. So you need to be careful while providing the data and try to maintain the accuracy as much as possible. If you are not planning to add the money to the account, do say you are. If you are not planning to do reinstatement on dividends, do say you are planning. So try to make your data as accurate as possible to get error-free results. When assumptions change, things also change in the calculator so you have to revisit the calculator in time to have a look if the investment is still serving you accordingly and giving you profit or not. This tool has made everything so easy for you to keep up with your plans of investment and make necessary changes timely to get the maximum out of it. This calculator is better than the dividend reinvestment calculator investopedia.
Stock Dividend Reinvestment Plan DRIP Calculator
Stock dividend reinvestment plan (drip formula) calculator is a simple tool calculator which helps to calculate the stock dividend reinvestment plan to check and keep the record of the company’s stock growth when you buy additional shares and make an investment in the company for growth. You can make various changes in this like you can turn the reinvestment option on or off. You can also make your account non taxable or taxable. If you choose a taxable account, it calculates the dividend in percentage. This makes everything so easy in investment planning and helps a person to make correct decisions of investment with accurate calculations. It helps to plan the investment for a long period and take necessary initiatives of investment by buying or selling the stocks and accurately using the money also make it grow in certain ways. The method starts with choosing a solid company that has a good history of reinstatement and payment of simple dividends. You have to follow a few steps to calculate from DRIP calculator, first, you have to enter the dividend stock symbol. Second, you just have to choose the data by choosing a start and end date. The third option is optional where you can have a comparison with others’ inboxes or symbols.
Stock Dividend Reinvestment Plan DRIP Formula
The dividend reinvestment plan is a program of investment that helps the individual investor to reinvent his dividend into additional frictional shares and get maximum profit. Shareholder receives the direct deposit in the bank after the dividends are paid meanwhile dividend reinvestment plan allows a shareholder to reinvent the amount and move further by buying shares directly from the company because these shares directly come from the company reserves and they are not in the market in the stock exchange. This method of planning is useful in building wealth and making a strong foundation plan for investment. There are ways to calculate the dividend reinvestment. You can calculate it by using the formulas which are:
Dividend Yield Formula:
Dividend Yield = Annual Dividend (Stock Price × 100%)
Dividend Reinvestment Formula:
FV = P * (1 + r / m) m×t
Following is the explanation to this formula:
- FV indicates the future value of your investment
- P indicates the price/ money you invested or what was your initial balance
- r indicates the yield of the dividend
- m indicates that how many times in a year the dividend is compounded
- t indicates the time that how many times the money was invested
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Value calculation of Dividend Reinvestment by using Monthly Contribution Excel
Stock dividend reinvestment can also be calculated in excel which helps to keep the check of each move. Stock dividends can be used in buying additional stock shares and making new investments which help to grow the profit and make it enjoyable. In monthly contributions excel you can project every dividend payment regularly by using the FV function but you cannot see the future increase or decrease in the distribution of dividends. It can be checked by using the annuity formula which will allow dividend growth. There are ways to calculate the dividend reinvestment. You can calculate it by using the formula in excel template which helps you to keep the recording step by step and you can see each investment with the time mentioned on it. It also helps to maintain the spreadsheet/ excel sheet to have everything in front of you and make necessary changes when required without any interruption and plan the next move accordingly.
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How does a Dividend Reinvestment Calculator work?
You have to add labels on the sheet: payment per year, dividend payment, number of years, dividends growth, common stock growth, constant future value, and future value growth in A1 to A8 cells.
After that start putting the data in the sheet-like number of shares you have, per share annual dividend payment, per year number of payments, per year number of investments in A1 to A4 cells.
Now enter the estimated growth rate annually and stock growth rate annually in cells A5 and A6.
You can get all this information from your broker who handles your common stocks.
After inserting all the information enter the formula “=FV(B6/B3, B4_B3, B1_B2/4)-1” in cell A7, this will help to calculate the future value of all dividend reinvestment but this formula does not consider the dividend and stock growth rate. Next enter “=IF(B6=B5,(B4_B2_B1)_(1+B6)^(B4-1),(B1_B2)((1+B6)^B4-(1+B5)^B4)/(B6-B5))” in cell number A8 this will also help to calculate the future value of all dividend reinvestment this formula does consider the dividend and stock growth rate.
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Benefits and drawbacks of this dividend reinvestment
There are numerous benefits and drawbacks of this dividend reinvestment. The benefits include that you are near to your retirement and you still need income to survive so you can invest your money this way and get profits. Another option is if your underlying assets are not performing well so you can sell them anytime. The one key benefit of dividend reinvestment is your money grows more quickly as compared to it can grow in your pocket. It is an easy way, inexpensive, requires less investment, and very flexible. Although it has all these benefits still it is not the right choice to make for many investors so you should always consult with financial advisers before you make such moves. You should not rely completely on dividend reinvestment and put all your eggs in one bucket just to avoid the risk of loss.