This dividend calculator projects how much income a stock portfolio will generate as it grows. It estimates your dividend yield, models reinvested growth, and works out how much you would need invested to reach a monthly income target. It is one of the guides in our Canadian stocks hub.
How this dividend calculator works
Enter the number of shares you hold, the current share price, your expected annual dividend yield, and any additional contributions you plan to make. The calculator shows how your portfolio value and dividend income grow over time with reinvested dividends.
Use the Dividend Growth mode to project how your current holdings will grow with reinvested dividends and contributions. Switch to Dividend Target mode to find out exactly how much you need to invest to reach a specific monthly dividend income goal.
What is dividend yield?
The dividend yield measures the ratio of the annual dividends a company pays divided by the share price. It tells you the expected income return on each dollar invested.
Dividend Yield = Annual Dividends Per Share ÷ Share Price
For example, if a stock pays quarterly dividends of $0.50 per share and the share price is $40:
- Annual dividend = $0.50 × 4 = $2.00
- Dividend yield = $2.00 ÷ $40.00 = 5.0%
A higher yield means more income per dollar invested, but extremely high yields (above 7–8%) can signal that the dividend may not be sustainable or the stock price has dropped significantly.
What is a good dividend yield in Canada?
| Yield Range | What it often means |
|---|---|
| Under 3% | Lower income today; often a company that keeps more of its earnings for growth, or whose share price has risen faster than its dividend |
| 3% to 5% | Moderate income; a common range for established payers |
| 5% to 7% | Higher income; worth checking how much of its earnings the company pays out |
| Over 7% | Higher risk: the market may doubt that the dividend will last |
Yields move with share prices, so where a company sits in this table changes over time. On September 25, 2026, TMX Money showed the Big Six banks yielding between 2.5% and 3.5%, Fortis 3.4%, Enbridge 5.8% and BCE 5.8%. A yield well above its sector’s usual level is worth checking against the payout ratio before relying on it.
Dividend yields by sector
Canadian dividend income is concentrated in a few sectors: the banks, utilities, pipelines, telecoms and REITs. Typical yields, payout ratios and the companies in each are compared in our guide to the best Canadian dividend stocks, with the bank stocks covered on their own in Canadian bank stocks and the trusts in Canadian REITs.
How much do you need invested for $1,000/month in dividends?
One of the most common questions for dividend investors is how much capital is needed to generate a specific monthly income. The answer depends on your average portfolio yield:
| Portfolio Yield | Capital Needed for $1,000/month | Capital Needed for $2,000/month |
|---|---|---|
| 3% | $400,000 | $800,000 |
| 4% | $300,000 | $600,000 |
| 5% | $240,000 | $480,000 |
| 6% | $200,000 | $400,000 |
| 7% | $171,429 | $342,857 |
Formula: Capital Needed = (Desired Annual Income) ÷ Dividend Yield
For $1,000/month ($12,000/year) at a 5% yield: $12,000 ÷ 0.05 = $240,000
Use the Dividend Target mode in the calculator above to work out the number of shares, and the amount invested, needed for a monthly income target at a given yield and share price.
How dividends are taxed in Canada
In a non-registered account, dividends from Canadian corporations are grossed up (by 38% for eligible dividends from large public companies, 15% for non-eligible dividends) and then offset by the dividend tax credit, which usually leaves them taxed at a lower rate than interest or employment income. The mechanics, the federal and provincial credit rates and worked examples are in our dividend tax credit guide.
In a TFSA, dividends are tax-free. In an RRSP, they grow tax-deferred and come out as ordinary income, without the dividend tax credit. US dividends face a withholding tax that depends on the account, which is why the choice of account matters; see which account to hold US stocks in.
Reinvesting dividends (DRIPs)
The calculator’s reinvestment option works like a dividend reinvestment plan (DRIP): each dividend buys more shares, which pay more dividends. Brokerages offer “synthetic” DRIPs that reinvest into whole shares, and some companies run their own plans, sometimes at a small discount. How to set one up and the trade-offs are covered in our DRIP investing guide.
Example: reinvesting over 25 years
Take $50,000 in a stock yielding 4%, with the dividend growing 5% a year and, for simplicity, a share price that never changes:
| Scenario | Value after 25 years | Yearly dividend income after 25 years |
|---|---|---|
| Dividends taken as cash | $50,000 | about $6,800 |
| Dividends reinvested | about $312,000 | about $42,300 |
Reinvesting multiplies the value because each year’s dividend buys shares that receive the next, larger dividend. Real results depend on the share price, taxes (outside a TFSA or RRSP) and whether the dividend keeps growing. The calculator above reproduces this case (as its Final Portfolio and Annual Dividend Income): enter 1,000 shares at $50, a 4% yield, 5% dividend growth, 0% price appreciation, 25 years, no monthly contribution, and reinvestment on or off.
Dividend growth or high yield
Dividend investors often choose between a lower yield from companies that raise their dividend quickly (many Canadian Dividend Aristocrats fit here) and a higher yield today with slower growth. The trade-off, and how to spot a yield that may be cut, is covered in our guide to the best Canadian dividend stocks. A diversified alternative to picking stocks is a dividend ETF; see the best dividend ETFs.
Related calculators
- Investment calculator, including price growth
- Compound interest calculator
- Capital gains tax calculator
- TFSA calculator
- RRSP calculator
- Retirement calculator
- Income tax calculator
Opening an account
Dividend stocks and ETFs can be bought through any Canadian brokerage; our guide to how to buy stocks in Canada walks through it. Brokerage sign-up offers change often, so confirm the current offer on the provider’s site.
Sources
The figures and rules on this page come from these sources, last checked against them on October 1, 2026. How we check facts.
- Justice Laws (Canada): Income Tax Act
- TMX Money: TMX Money | TSX Today | Canadian Stock Market