You can view your investment portfolio within your brokerage account. It will show your positions, the number of shares you own, net worth, daily gains, and total capital gains in real time.
But that doesn’t tell the whole story for a dividend investor. And it’s not enough information to help you improve your investment portfolio.
This is where a dividend tracker can be a valuable investment tool to help you measure current progress, keep you on track to achieve personal investment goals, and estimate forward income.
We’ll review what a dividend tracker is as well as the advantages and disadvantages of different types of trackers. You’ll also learn why it is crucial to use a dividend tracker to grow your net worth and how it can help you maximize your investment returns.
What Is a Dividend Tracker?
A dividend tracker is a valuable investment tool to measure your dividend revenue. It is especially relevant for investors who are retired or are planning to retire, as you need to know your passive cash flow and create your retirement budget.
Your brokerage account will provide only limited information on the dividends you receive. Gain and loss metrics reflect only the change in the stock price and do not include additional payouts. In contrast, a dividend tracker can calculate important dividend-investing metrics — for example, revenue trend, total dividend yield, and yield on cost. It will provide insight into dividend income, yields, and portfolio growth.
Dividend tracking will show you what portion of your portfolio has the highest return and what securities hold you back. By selling underperforming stocks and buying stocks with higher dividend yields, you will achieve a higher total return. Through analyzing and optimizing your portfolio, you will be able to maximize profits and reach your passive income goals.
How To Track Your Dividend Income
There are multiple options for tracking the passive income you earn from dividends. You can do it manually, automate calculations in Excel, or use dividend tracking software. Let’s review these tools and compare their pros and cons.
1. Manual Dividend Tracking
Manual tracking is the simplest way to calculate your return but the least sustainable. If you own only one or two stocks, you can track dividend income manually using pen and paper. But if your investment portfolio consists of different securities, it is not the most suitable solution. It is too easy to make a mistake, and you will need to do a lot of calculations and research about upcoming dividends.
- Pros: Simple, free
- Cons: Manual calculations, easy to make a mistake, time-consuming, requires additional research
2. Dividend Tracking in Excel or Google Sheets
Another option is to build a portfolio tracker spreadsheet using Excel or Google Sheets. While using a spreadsheet will help you automate the math, it may take some time to set up the calculations and formulas. And there may be a steep learning curve if you’re not already familiar with using spreadsheet formulas and functions.
Even if you’re a formula pro, Excel and Google Sheets will not be a fully automated solution. You will still need to input your stock purchases, sales, and payouts manually. And to create an accurate income forecast, you will need to research and plug in ex-dividend dates and payouts for each of your tickers.
In other words, you will have to build and maintain a dividend schedule. It can feel overwhelming as each stock pays out dividends at a different time on a monthly, quarterly, or yearly basis. And you will have to perform additional research to check if a dividend’s yield changes over time.
With Excel or Google Sheets, you may not be able to create advanced metrics or use a complex “what if” function to see what stocks you should sell, what stocks you should buy, and how it will impact your income. As a result, you may be at risk of leaving money on the table.
- Pros: Automatic calculations, shows historical returns, customizable, free
- Cons: Manual data entry, possibility of errors, requires additional research, time-consuming to set up and update
3. Dividend Tracking Software
There are several software tools to support individual passive income investors. Some software products can track stock prices of various ETFs, mutual funds, their ex-dividend dates, and much more. Setup can be as easy as downloading your investment portfolio information from your brokerage account and uploading it to the tool.
Software will keep you informed on the performance of your dividend portfolio. You will no longer need to waste time on research or double-check your calculations.
- Pros: Automated reporting, no risk of errors, history tracking, various add-ons, no need to be tech-savvy
- Cons: Not free (usually subscription-based)
How Divcaster Software Can Help You Track Your Dividends
Dividend tracker software can crunch the numbers for you and save a lot of time. Powerful analytics and a user-friendly interface will automate the tracking process and will help you most effectively manage your portfolio.
Divcaster is a dividend tracker that will help you track, analyze, and forecast dividend income. It is the most advanced dividend tracking tool and the best option you can find on the market.
There is no need to calculate your income manually since all the legwork will be done for you. Divcaster will show you the shares you have in your portfolio and their individual payouts. It will also guide you in making tweaks to your portfolio so you can maximize your passive income.
The software includes some unique features and the dividend-specific metrics you want to watch, such as:
- Future cash flow: Divcaster will project the expected dividend payouts for the next 12 months and predict cash flow. This can help you with your budgeting by showing how much money you will receive in the future.
- What-if analysis: The built-in what-if function will help you research and analyze your portfolio. It will show you what happens to your passive income if you buy or sell different stocks. This advanced feature can also help you make analysis-based decisions about portfolio diversification and find an optimal way to reinvest your dividends.
- Live updates: Divcaster will send you notifications about your portfolio — for example, what stocks increased or decreased their payouts. The software will also have the most accurate calculation of what money you received and when, so you don’t need to input your dividends manually.
- Portfolio growth potential: Divcaster will show you how much passive income you should expect in five, 10, or 20 years by compounding the current growth rate.
- Total dividend yield: You need to know your overall investment portfolio performance and have greater visibility of your earnings versus your goals. In a way, it can serve as a benchmark of your portfolio performance. Divcaster will help you determine if you need to optimize your investment portfolio to maximize dividend growth.
- Yield on cost (YOC): Divcaster will calculate one of the most helpful passive income metrics — the yield on cost. This is equal to the annual dividend divided by the original stock price you paid. The ratio tells you the real rate of return for your securities — a number that’s unique to you. It is an indicator of how much income you’re getting from your dividend stocks, regardless of what their stock prices are doing.
- All accounts in one place: Many investors have a mix of accounts — IRA, 401k, brokerage accounts. Using this dividend tracker software, you can view your various assets and track your overall progress all in one place.
Sign Up for Divcaster and Start Tracking Your Dividends
If you’re serious about dividend investing, then you’ll want to use a dividend tracker to give you insights into your portfolio and help you maximize your profits. Dividend tracking provides greater visibility into your growing income and helps forecast future dividend payouts.
While you can try to do this on your own or spend hours setting up formulas in Excel, dividend tracking with Divcaster will bring your investing to the next level. It will highlight the weak spots — the low-return securities — that you can turn into opportunities. The What-If analysis will help you plan what stocks to sell and what to buy to improve your total dividend yield.
As a bonus, Divcaster has a preloaded portfolio based on “Dividend Hunter” recommendations, so you can track your performance versus Investors Alley’s picks.
Give Divcaster a try today with a 14-day free trial.