DRIP: Dividend Reinvestment Plan Resources
This article is from the Investing Articles:
Mutual Funds series.
DRIP: Dividend Reinvestment Plan Resources
What is the difference between a Direct Purchase Plan (DPP) and a
Dividend Reinvestment Plan (DRIP)? Both are no-load stocks and in both
cases the individual investor can buy stock directly from the company
without going through a broker. However, to buy a DRIP, you need to
already own stock to reinvest your dividend as more stock. With a DPP,
you can be a first-time buyer. Of course most companies with a DPP
also offer a DRIP. (Though there are some companies with a DRIP who do
not yet have a DPP.)
At one time, DPPs were offered mainly by public utilities. This is
changing rapidly since the number of companies offering stock directly
to the public is doubling about every six months. Public companies
are, at least in part, motivated to create DPPs to offset the
increasing number of stocks being held in "street name" rather than by
registered holders. At the same time, a recent SEC ruling makes it
easier for companies to sell stock directly to the public.
You now also see more mention of Direct Public Offerings
(DPOs). Until recently, offering IPO stock directly to the public
worked best for local companies who enjoy good word-of-mouth publicity
in the community. With the growth of the Internet of course, however,
the community has expanded.
Of course these plans are popular with investors wishing to avoid
brokers' fees. However, David Halseth, of Halseth Capital Management,
cautions, "Don't let the tail wag the dog by deciding to buy stock
based on whether or not the company offers direct purchase. You should
buy based on your investment strategy and research. But if you were
going to buy the stock
anyway, of course purchase directly from the
- Benefits of Dividend Reinvestment
Plans. (http://www.mreic.com/) By Eugene W. Landy, President, Monmouth Real Estate
and Manage Your Own Mutual Fund. By Vita Nelson and Donald
J. Korn. A guide to developing a portfolio using dividend reinvestment
plans, from the editor of The Moneypaper. List Price: $15.95,
Amazon Price: $12.76.
Stocks Without A Broker. By Charles Carlson. The penultimate guide
to DRIP investing. Starting with $10 to $25 a month, investors can buy
stock in many of America's leading public companies, and this book
will tell you how. Buying Stocks Without a Broker lists over
1,000 DRIPs with details on each plan, as well as model DRIP
portfolios and corporate profiles. The book outlines the many ways of
getting started in dividend reinvestment plans, including brokers and
other DRIP-starter programs. Carlson's demonstrates how DRIP investing
can lead to long-term financial success for individual investors who
don't have thousands of dollars to pour into stocks all at once. Order
here and save 20% from Amazon.com. List Price: $17.95, Amazon Price:
- DRIP Investor. (http://www.dripinvestor.com) The
latest news on Dividend Reinvestment Plans and No-Load Stocks and
their many commission free investment options. Weekly commentary is
provided by Charles Carlson, Editor of DRIP Investor newsletter, and
the leading DRIP expert. Model DRIP portfolios, sample issues of the
newsletter, and frequently asked questions about dividend reinvestment
plans and no-load stocks.
Lunch on Wall Street: Perks, Freebies, and Giveaways for
Investors. By Charles Carlson. Who says small investors never get
a break? Here's a wealth of mouth-watering perks they can all
enjoy--from the bestselling author of Buying Stocks Without a
Broker. Carlson identifies the leaders of the perks and tells how to
buy stocks at a discount, build clout, cut out brokers, and
more. Order here and save 20% from Amazon.com. List Price: $14.95,
Amazon Price: $11.96.
and Debbie's Guide to Getting Rich on Just $10 a Week: How We're
Making a Fortune-And You Can Too-Using Dividend Re-Investment
Plans By Deborah Rosen Barker and Julie Behr Zimmerman. Designed
for first-time investors and anyone who ever thought investing was too
complicated, this easy-to-follow guide--in the tradition of The
Beardstown Ladies' Commonsense Investment Guide--provides everything
you need to know to start investing without a broker. Order here and
save 20% from Amazon.com. List Price: $9.95, Amazon Price: $7.96.
- The Motley Fool. (http://www.fool.com) Information
about DRIPs and a model DRIP portfolio, are offered by the Fools.
- National Association of
Investors Corporation. (http://www.better-investing.org) NAIC's Low Cost Investment Plan allows
members to buy a share of 145 companies to get started in their DRPs,
for the purchase price and a small service charge.
Stocks: How to Buy Your First Share and Every Share Directly from the
Company--With No Brokers Fee. By Charles Carlson. Complete
information on more than 100 companies offering direct investment
programs, including reports on every no-load stock complete with phone
numbers, business profiles, financial information and exclusive
performance ratings. Order here and save 20% from Amazon.com. List
Price: $16.95, Amazon Price: $13.56.
- No-Load Stock Insider. (http://www.noloadstocks.com)
The only newsletter devoted exclusively to buying your first share --
and every share -- of stock directly, without a broker. Includes a
direct of no-load stocks, and a free E-Mail Alert Service to have
information on new no-load stocks e-mailed to you instantly!
& Poor's 100 Best Dividend-Paying Stocks. High dividends are
one of the key factors sought by investors when judging the value of a
stock. In this new guide, Standard & Poor's, the world's most
reliable name in investing, highlights the 100 most profitable
dividend-generators--complete with easy-to-find, easy-to-understand
data compiled for investors at all levels. Order here and save 20%
from Amazon.com. List Price: $19.95, Amazon Price: $15.96.