What this tool does
Estimate shares purchased, annual dividend income, monthly average and indicated dividend yield from current inputs.
How to use it
- Enter the amount invested and current share price in the same currency.
- Enter the expected annual dividend per share.
- Calculate and review share count, income and yield before considering taxes or future changes.
Formula and method
Estimated shares = investment ÷ share price. Annual income = shares × annual dividend per share. Monthly average = annual income ÷ 12. Indicated yield = annual dividend per share ÷ share price × 100.
Worked example
An investment of 10,000 at 50 per share represents 200 shares. With an annual dividend of 2 per share, estimated income is 400 per year, 33.33 per month and a 4% indicated yield.
Common uses
- Converting a quoted dividend into an income estimate
- Comparing price and dividend assumptions
- Checking the arithmetic of an income plan
Limitations
Dividends are not guaranteed and may change or stop. The model ignores payment dates, reinvestment, price movement, withholding, income tax, fees, currency conversion and whether fractional shares can actually be purchased.
FAQ
Is dividend yield the same as total return?
No. Total return also includes share-price changes and may include reinvestment and costs.
Why is monthly income called an average?
Companies may pay quarterly, semi-annually, irregularly or not at all; dividing annual income by 12 does not predict payment dates.