Dividend reinvestment plans (or DRIPs) are plans that permit shareholders to reinvest dividends to purchase additional shares (or fractions of shares). These plans bypass brokers, enabling shareholders to save on commissions.
A DRIP can also eliminate the nuisance effect of receiving small cash dividend payments. Second, some DRIPs let you reinvest your dividends in additional shares at a 5% discount to current prices. Third, many DRIPs also allow optional commission-free share purchases on a monthly or quarterly basis.
Generally, investors must first own and register at least one share before they can participate in a dividend reinvestment plan. Registration will generally cost $40 to $50 per company. The investor must then notify the company that he or she wishes to participate in the company’s DRIP.
There are also separate DRIPS that are available through most discount brokers (these are called “synthetic DRIPs”). The bookkeeping is simpler with these DRIPs. Under these plans, brokers will reinvest dividends on shares that you hold in your account. Not all your dividend stocks may be eligible for these plans.
Using a dividend reinvestment plan can be very profitable in the long-term. In addition to enrolling in a dividend reinvestment plan, please keep TSI Network’s three-part Successful Investor philosophy in mind:
Discover how to put extra strength in your portfolio with our advice on how to identify high-quality dividend stocks. It’s all in our newly updated report, and it’s yours FREE! Download Dividend Paying Stocks: How High Dividend Stocks Can Supercharge Your Income Investing.
This pipeline has completed its acquisition of rival Veresen Inc. for $9.7 billion. The purchase appears to be an excellent fit for the company: Veresen’s assets, including its 50% stake in the Alliance natural-gas pipeline, will broaden Pembina’s operations and its U.S. exposure. It should… Read More
Dividend yield is just one of the elements to look for while selecting stocks for a great dividend stock portfolio
When you’re looking for income from investments such as Canadian dividend stocks, the dividend yield is typically your most important consideration. But in some cases, dividend… Read More
Dear client:
In the wake of the 2007-2009 financial crisis, Manulife cut its dividend by 50% to conserve cash. Thanks to the company’s improving outlook, it resumed its pattern of annual dividend increases in 2014. Moreover, the stock remains attractive in relation to its earnings.
Manulife’s… Read More
Dear client:
Pembina is set to complete a $5.2 billion expansion program this year. Those new operations will immediately add to cash flow and support the company’s plans for future dividend increases. In fact, Pembina has already begun to benefit from a new wave of growth… Read More
Dear client:
Pembina is set to complete a $5.2 billion expansion program this year. Those new operations will immediately add to cash flow and support the company’s plans for future dividend increases. In fact, Pembina has already begun to benefit from a new wave of growth… Read More
PLEASE NOTE: Due to the Good Friday holiday, our next Hotline will go out on Thursday, April 13, 2017.
CANADIAN IMPERIAL BANK OF COMMERCE, $115.59, Toronto symbol CM, is Canada’s fifth-largest bank, with total assets of $501.4 billion.
The bank recently raised its quarterly dividend by 2.4%,… Read More
Recently, TSI Dividend Advisor reported on TransCanada’s completed acquisition of U.S.-based Columbia Pipeline Group. Combined with other projects underway, Columbia’s operations have spurred the company’s revenue and earnings, and should give TransCanada more cash for dividends.
TRANSCANADA CORP. $61 (Toronto symbol TRP; Income-Growth Dividend Payer… Read More
Pat McKeough recently replied to an Inner Circle member looking for an opinion on the utility company. New wind- and solar-power projects have boosted its revenue, says Pat, but not its cash flow.
Q: Hi Pat: I own a large number of Northland Power shares… Read More
A: Northland Power Inc., $24.20, symbol NPI on Toronto (Shares outstanding: 172.0 million; Market cap: $4.2 billion; www.northlandpower.ca), develops, builds, owns and operates natural gas-fired power plants, wind farms, solar projects and hydroelectric facilities.
The company switched its registration from an income trust to a corporation… Read More
ALGONQUIN POWER & UTILITIES CORP., $11.29, Toronto symbol AQN, operates through two main businesses: Generation and Distribution.
The Generation Group produces and sells electricity across North America. It generates 1,385 megawatts of power through wind (65%), thermal (24%), hydroelectric (9%) and solar (2%) operations.
The Distribution Group… Read More
Learn everything you need to know in 'The Power and Profits of Energy Stocks' FREE Special Report from The Successful Investor.
Canadian Natural Resources Stock Guide:
What to look for in Canadian Energy Stocks and more
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What personal information do we collect?
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Changes to this Policy
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