Investment Amount

The investment amount is the initial amount that the investor is looking to deploy into the company. This could be any amount the investor feels comfortable with; $100, $1,000, $10,000, etc.

I personally feel comfortable investing in $2,000, $5,000, or $10,000 increments for my dividend income calculator calculations.

Stock Ticker

This is the field where you input the stock sticker (i.e. T, MMM, AAPL). Nothing calculates off of this field, so you could leave it blank if you’d like. It would be best practice to fill this out to ensure you remember which stock you are reviewing.

Share Price

Enter in the stock’s current share price or the target price of where you’d like to purchase at into the dividend income calculator. This could be the share price as of today, or this could be a share price of where you are considering deploying your capital.

I typically use the current share price, as I use this as a tool as to whether or not I consider taking a particular company through my entire investment process.

Dividend

Enter in the current dividend or target dividend for the stock you are considering investing in.

Dividend Frequency

Toggle the frequency of the yearly dividends. By default, this is set at 4, as most publicly-traded companies with a dividend policy pay on a quarterly basis.

Annual Dividend Payout

This is the annualized dividend payout amount. It is calculated by taking the quarterly dividend and multiplying it by the dividend frequency.

Payout/Yr.

This is how much dividend income you can expect to receive if you invested the ‘investment amount’ at the current dividend payout.

Shares Purchased

This is the number of shares you would receive should you deploy your capital into purchasing shares at the input ‘share price’ at the input ‘investment amount’.

Payout/Qtr.

This is how much dividend income you can expect to receive per quarter. This is calculated by dividing the payout ratio by the ‘dividend frequency’ amount.

Yield

This is the current dividend yield.  This is calculated by taking the current ‘annual dividend payout’ and dividing it by the ‘investment amount’.  As a rule of thumb, the higher the yield demonstrates a higher risk profile by the market.

Share Accumulation/Yr.

This represents how many additional shares you can purchase per year via  DRIP program.  This means that when you receive dividends, rather than take these distributions as cash, you reinvest into your stock positions.

*A quick caveat: this amount assumes a stable share price.  Since this scenario will never be the case in open markets, this is to be taken as a general idea of how many more shares one can expect to receive when having a position on DRIP.  Obviously, this means if share price goes up, you will receive less share accumulation; if share price goes down, you will receive more share accumulation.

Summary

By using this dividend income calculator tool, I have been able to build up a dividend portfolio that currently pays me $6,600+ of dividend income/yr!

I sincerely hope that it helps you in your journey towards Financial Freedom!