Project dividend income forward at a compound growth rate and see the yield on cost it reaches.
A dividend growing at 7% doubles roughly every ten years, so yield on cost climbs steadily even if the share price does not move. Cumulative dividends are the sum of a geometric series over the period. Dividend growth is what turns a modest starting yield into substantial income over a couple of decades, and it is far more predictable than price appreciation.
Dividend Growth
Future dividend = current dividend × (1 + growth rate)^years
Future dividend = current dividend × (1 + growth rate)^years A dividend growing at 7% doubles roughly every ten years, so yield on cost climbs steadily even if the share price does not move. Cumulative dividends are the sum of a geometric series over the period.
Dividend growth is what turns a modest starting yield into substantial income over a couple of decades, and it is far more predictable than price appreciation.
This calculator takes 5 inputs: Current annual dividend per share, Annual dividend growth rate, Years to project, Price paid per share, Shares held. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.