Why dividend yield matters
Dividend yield is an important measure for income investors. It helps you understand the cash flow you receive relative to the current price of the stock or ETF. Yield is especially relevant for those seeking steady income or for retirees who prioritize regular payouts. A healthy dividend yield, combined with sustainable payout policies, often forms a bedrock of long-term income strategies.
How to use this tool
Enter the current market price and the annual dividend per share, specify the number of shares you hold, and choose the dividend frequency. If you expect dividends to rise over time, set a dividend growth rate. Optionally project for multiple years and toggle reinvestment to see how compounding changes outcomes. The tool also exports results to CSV and provides a shareable link for your inputs.
Example (illustrative)
Suppose you own 200 shares of a stock priced at 150 per share that pays 6 per share annually. Use the tool to see the annual dividend income, the yield percent, and the expected income if you reinvest dividends for 5 years. This helps you compare dividend strategies or evaluate whether dividend income meets your cash flow needs.
Problems and solutions (general)
Problem: High yield with poor company fundamentals
Yield can be high when price falls, but the dividend may be unsustainable.
Solution
Combine yield analysis with payout ratio, earnings stability, and business outlook before deciding.
Problem: Relying on yield alone
Focusing only on yield may ignore capital gains or risks.
Solution
Evaluate total return (dividends plus price change) and align to your investment goals.
FAQs
Q: Does the tool include dividend reinvestment?
A: Yes. Toggle reinvest to model reinvesting dividends at the given price.
Q: Can I enter quarterly or monthly dividends?
A: Yes. Choose the frequency and the tool adjusts calculations accordingly.
Q: Are projection numbers guaranteed?
A: No. Projections use your inputs and assumptions. Use realistic estimates and review periodically.


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