Have you wondered what the outcome of years of dividend growth investing could be? Or when could you collect the results of years of discipline, frugality, and consistent dividend investing? Will there be any rewards at all?
I did it. And so, I researched free dividend growth calculators for you, which are publicly available. Below are the top 5 that I liked the most. I will compare and analyze the available features and the presented outputs.
Long story short, my favorite is MarketBeat Dividend Calculator due to its most complete feature set, but let's see precisely what these features are in the article. I will also include a comparison table at the end.
The intention is to create a hypothetic but realistic dividend portfolio setup, not to pick an actual stock portfolio.
Let's agree on some input data, i.e., what do we intend to invest, and what do we expect from the market? I will try to be slightly optimistic and provide the conditions below for all the calculators.
Dividend Calculation Prerequisites:
Initial Investment: $1,000
Annual Contributions: $1,200
Expected Dividend Yield: 5%
Dividend Frequency: Quarterly
Expected Annual Dividend Increase: 8%
Expected Annual Share Price Increase: 5%
Dividend Reinvestment Plan (DRIP): Yes
Dividend Tax Rate: 10%
Holding Period: 20 years
Before we dive into the subject, I invite you to check my latest book on dividend investing, Live Off Dividends. There, you can learn how to properly select dividend stocks and create a winning dividend growth portfolio.
1. Tipranks Dividend Calculator
This was the first result I got on Google, and it did a perfect job. Tipranks Dividend Calculator is straightforward and perfectly incorporates all of our prerequisite requirements.
The interface is quite lovely and not over-complicated. It is very simple to plug in the data and get the result after 20 years. (OMG, how old will I be then!)
We clearly see the end balance of $206,789, which was my main question. It's a little bit not pleasant that we do not see the total contributions; however, that is very simple to calculate:
$1,000 + $1,200 x 20 years = $25,000. Remember this number, as it will be the same for the other calculators. This is an excellent return and outcome of the 20-year investing period.
Now about the Living Off Dividends...
According to the results, the annual Net Dividend for 20 years will be $41,463. That is a good number, but it is up to you to determine whether that's sufficient to quit your job.
If it is not sufficient, you need to extend the time horizon or increase the regular contributions. Be careful about stocks with yields higher than 5%, as they might be unsafe.
You can learn more about how to select your dividend stocks in my related article:
Now, back to the calculator itself.
It is disappointing to miss a nice chart illustrating how the total return grows exponentially, leaving behind our modest contributions. It's a pity for me because I love that kind of chart. Let's see if other calculators have it. In addition, the "How To Use" section is a little bit poor.
The good thing is that they add a yearly portfolio statement showing the situation at each year's end.
Let's move to the following Dividend Calculator and see if the numbers match.
2. Marketbeat Dividend Calculator
I have plugged in the same data in the Dividend Calculator from Marketbeat and let it run its magic. Here is what I got after hitting the "Calculate Dividends" button:
We can observe from the beginning that the interface is less fancy, but who cares? Instead, they have an extra option called "Tax-Exempt Dividend Income Allowed Per Year." That is to use if you have a dividend tax exemption and pay taxes only for dividends above that value. Taxes are complicated, and I am not covering them here, but having the option and flexibility is good.
Now, the result. We see a vast difference from what we got in the previous calculator. $90,294 as the ending balance is incomparable with what we got from Tipranks.
You will see in the following calculators that the numbers do not match either. I did not investigate the reason in this article, as the purpose was to evaluate usability and features. I will investigate that and come up with a dedicated piece.
The Annual Dividend Income is also way out. We need to find where is the truth. But for now, let's move to other aspects.
I like seeing the charts they added for Portfolio Balance, Dividend Income, and Yield On Cost. That is a big step forward.
They also include a yearly portfolio snapshot in the form of a payment schedule that is easy to digest.
Their "How To Use" section is significantly richer than we saw before.
Overall, it's a great calculator, and the only question remaining is the difference in the total return.
Let's see what other calculators have to say about it.
Now, a big name comes...
3. Forbes Dividend Calculator
The interface on Forbes Calculator is the best so far. I also like that the names of the fields are much simpler compared to the other two calculators, so it is easier to follow.
What is missing is the dividend distribution frequency. That might not be an issue for a beginner; however, when you want to do more advanced research, that could play a role.
Although the achieved annual dividend payment is not directly visible, it is available in their payment schedule.
Unfortunately, they do not include any chart of portfolio evolutions. So far, I am not impressed at all.
Let's go to the next one.
4. Dividendathlete Dividend Calculator
The first thing I noticed on DividendAthlete was the modern interface, including nice sliders for picking your numbers.
What is weird is that you cannot adjust "Expected Annual Dividend Increase" independent of "Expected Annual Share Price Appreciation". For some reason, they stick to the same value. I have no clue why; maybe that is a bug in their program. For this reason, I will consider that they do not have an expected share price appreciation feature.
However, they compensate for that with top-notch charts. It is a pleasure to watch those exponential curves.
So far, I like this interface the most.
It would have been really nice if they included a rich how-to-use guide or general dividend educational material.
By the way, you can learn more about these aspects and how to build your dividend portfolio here:
We are almost through. Let's check one more calculator.
5. Trackyourdividends Dividend Calculator
As you can easily see, they lack many features, such as dividend taxation and DRIP. They also do not provide any chart or any other means to compensate for the lack of these features.
No other comments are necessary here.
I think we are good for now. I will stop here.
Let's make a summary of what we have learned.
Summary of Dividend Calculators
In order to provide you with an easy-to-understand and follow overview, I have prepared the comparison table below. There, you can see what fits you best in terms of flexibility of input data or output data range.
From my point of view, the clear winner is MarketBeat Dividend Calculator. It has most of the features available. The only missing thing is a specification of the total contribution. However, that is not a big deal as it is very easy to calculate how much you contributed during the specified period. Simply multiply the yearly contributions by the number of years.
I hope that was interesting and useful for you! If you enjoyed the article, give it a heart and subscribe for fresh and valuable content! Don't forget to check out my book, Live Off Dividends, which will help you on your journey to financial freedom.
Now, let's look at some frequently asked questions, which might also cover your questions.
Frequently Asked Questions about Dividend Calculators (FAQ)
How are Dividends Calculated?
Dividends per share (DPS) can be calculated using the formula:
DPS = Total Dividends Paid / Number of Outstanding Shares
For example, if a company pays $2,000,000 in dividends and has 1,000,000 outstanding shares, the DPS would be $2.00 per share.
The Dividend Yield can be calculated by dividing the dividend paid per share by the share price:
Dividend Yield = Dividend per Share / Share Price
How often do Dividends Pay?
The frequency at which dividends are paid depends on the company's dividend policy. Most companies pay dividends on a quarterly basis. This means that shareholders receive dividend payments four times a year. The payment dates are usually spaced evenly throughout the year.
How to Calculate how much Dividend you will Receive?
To calculate how much dividend you will receive, you can use the following formula:
Dividend Income = Number of Shares x Dividends per Share
Here's a small step-by-step guide:
1. Determine the Number of Shares:
Identify the number of shares of the stock you own. This information is usually available in your brokerage account statement.
2. Find the Dividends per Share:
Check the company's dividend announcement or financial statements to find the dividends per share (DPS). This is the amount of dividend paid for each share you own.
3. Apply the Formula:
Multiply the number of shares you own by the dividends per share to calculate your dividend income.
Example:
If you own 100 shares of a stock, and the dividend per share is $2.00, the calculation would be:
Dividend Income = 100 shares x $2.00 per share = $200.00
Remember that this calculation provides an estimate based on the declared dividends per share. The actual amount you receive may vary slightly due to factors such as taxes, fees, and any changes in the number of outstanding shares after the record date.
At what Price is the Dividend Calculated?
The dividend is calculated based on the market price per share on the ex-dividend date. If you buy shares before the ex-dividend date, you are entitled to the dividend, and the market price at that time is what determines the dividend amount per share.
If you buy shares on or after the ex-dividend date, you won't receive the current dividend, but you may be eligible for the next one. Always check the ex-dividend date to understand whether you will be entitled to the upcoming dividend.
Where can I find the best free dividend calculator?
That was the aim of this article. Several other free dividend calculators are available online that can help you estimate your potential dividend income.
When using these calculators, it's essential to input accurate information for the number of shares, dividend per share, and any other relevant details. Additionally, note that these tools provide estimates and projections, and actual results may vary based on changes in stock prices, dividend policies, and other factors. Always refer to the latest financial reports and announcements from the companies you are invested in for the most accurate and up-to-date information.
Learn more about Dividend Investing in the Related Articles:
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