Calculator
Formula used
Net Cost = (Share Price × Shares) + Purchase Commission
Net Dividend₁ = (Annual Dividend per Share × Shares) × (1 − Tax Rate)
Cumulative Net Dividends after n years = D₁ × [((1 + g)ⁿ − 1) ÷ g], when growth exists.
If growth is 0, then Cumulative Net Dividends = D₁ × n.
Break-even occurs when cumulative net dividends become equal to, or greater than, net purchase cost.
How to use this calculator
- Enter the current share price and the number of shares you own.
- Provide the annual dividend per share from company guidance or history.
- Add your purchase commission for a more realistic recovery estimate.
- Set the dividend tax rate that applies to your dividend income.
- Estimate annual dividend growth if you expect payouts to rise.
- Choose a target holding period to compare recovery progress.
- Press calculate to view the break-even years, chart, and schedule.
- Use the CSV and PDF buttons to export the resulting schedule.
Example data table
| Scenario | Share Price | Shares | Dividend/Share | Tax Rate | Growth Rate | Target Years |
|---|---|---|---|---|---|---|
| Conservative Income | $38.00 | 150 | $1.60 | 10% | 2% | 10 |
| Balanced Recovery | $48.00 | 250 | $2.40 | 15% | 4% | 8 |
| Higher Yield Profile | $62.00 | 300 | $4.10 | 20% | 5% | 7 |
FAQs
1) What does dividend break-even mean?
It is the point where cumulative net dividends recover your original purchase cost, including commission. This version focuses on dividends only, not capital gains from selling shares.
2) Why include dividend taxes?
Taxes reduce the cash you actually keep. Using net dividends gives a more realistic estimate of how long recovery may take in your own situation.
3) Why include purchase commission?
Commission increases your real entry cost. Ignoring it can make the break-even period look shorter than it actually is, especially for smaller positions.
4) What does dividend growth change?
A positive growth rate raises future payouts and can shorten break-even time. A negative rate lowers future payouts and may delay recovery or prevent it entirely.
5) What is effective break-even price per share?
It shows how much dividend income has effectively reduced your cost basis per share. As dividends accumulate, that effective price falls.
6) Does this calculator include reinvested dividends?
No. It measures recovery from dividend cash flow itself. Reinvestment can improve long-term compounding, but it would require extra assumptions about purchase prices and timing.
7) Can break-even become impossible?
Yes. If dividends are too low, taxes are too high, or payouts shrink sharply, cumulative dividends may never catch up with the original cost under the chosen assumptions.
8) Is this a buy or sell recommendation?
No. It is an educational planning tool. Always review company quality, payout safety, valuation, and your own risk tolerance before investing.