Dividend Income Calculator

What this number really means

A dividend is a slice of a company's profit paid to the people who own its stock. Your yearly income is simple math: shares times the dividend per share, or the money you invested times the yield. Own 250 shares paying $2.40 a share and about $600 a year lands in your account, price moves or not.

Yield on cost measures that paycheck against what you originally paid. Buy at a 3% yield, hold while the company raises its dividend, and your yield on cost can climb past 6% — the income grows even though the yield on today's price barely moves. It is the quiet reward for holding good companies.

What does a real monthly paycheck take? $500 a month is $6,000 a year, which at a 4% yield means about $150,000 invested. $1,000 a month at 4% takes roughly $300,000. Big numbers — but nobody starts there. Dividend income is built one position at a time, and reinvesting speeds it up.

Three warnings before you chase a yield. A giant yield usually means a fallen price and a shaky business — exactly when dividends get cut. In a regular brokerage account, dividends are taxable the year they arrive, even if you reinvest every cent. And a quarterly payer shown as monthly income is an average across the year, not a check every month.