Where to Buy DRIP Stocks

Posted by Sun on March 18, 2007
Post viewed 902 times, 6 so far today

I am a fan of dividend reinvestment plan (DRIP), though I didn’t start participating till late last year. Currently, I have several stocks purchased through DRIP programs: Bank of America (BAC), Progress Energy (PGN), and Procter & Gamble (PG). The first two are from ComputerShare while the last one is from the company directly.

The main benefit of buying stocks directly from the issuer either through a Direct Stock Purchase (DSP) plan or a DRIP program is that you don’t always have to pay a commission when makig a purchase as you do with most brokerages, though some DRIP programs also charge a fee for direct purchases and in some cases the fees are no cheaper than what you will pay through a broker that also offers dividend reinvestment. Therefore, when I decide which DRIP program to participate in, I only choose those with either no purchase fee or the fee is much lower than that’s charged by my brokerage firm such as Sharebuilder. Two of my DRIP stocks, BAC and PGN, don’t charge purchase fees.

If you are interested in DRIP stocks, the following are some places that offer DRIP/DSP programs or related information:

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7 Comments
March 18, 2007

Hey Sun,

Good call on the DRIPS, don’t forget about amstock.com, they do direct purchase and DRIP programs also!

-James

Posted by James
March 19, 2007

I have quite a few DRIP stocks that my parents bought me when I was younger. In addition to the ones you listed and the one James said I also have used:

- Mellon Investor Services
- Wells Fargo Shareowner Online

Posted by Chuck
March 19, 2007

just so you know, some brokerages will reinvest your dividends for no charge.

Schwab did this for me and tradeking does it for me now.

Posted by blackhawkzone
March 28, 2007

I would recommend an alternative in zecco.com. You will have more control over the price at which you buy, making it a favorable dollar cost investing.

Posted by abhush
March 30, 2007

abhush: Actually, I thought about Zecco and like the idea of no-fee trading. The only reason I didn’t use it is that I think they are quite young (less than one year) and whether they can maintain the current fee structure isn’t clear. When everybody started to charge fees for mutual fund investing, Firstrade said they will keep it fee-free. They kept that promise for several years (I think it’s three), then started to charge fees for mutual fund investing early this year. I don’t know if Zecco can survive and continue to offer zero commission trading. I’d like wait a while and see what happens with them. Are you using Zecco?

Posted by The Sun
October 11, 2007

Hello All:

How do one select a stock(s) to invest in DRIPs? Like what are the metrics to look for?

If anyone could provide some relevant information, I would greatly appreciate it.

Cheers
RV

Posted by RV
October 11, 2007

If you are using brokers such as Zecco, which charges $0 commission and offers dividend reinvestment, then there’s no on need to use DRIP. The reason for using DRIP, I think, is that you can buy stocks directly from
the company regularly, not through a broker, so you can pay less in commissions and fees. That’s not the case any more as most brokers do have dividend reinvestment and you can buy as many shares as as you want with a flat fee. However, if you don’t use Zecco and will pay commissions when buying stocks through your broker, then DRIP may still have some value. Computershares is a good place to find dividend-paying stocks. When I
bough a couple of stocks through Computershares, I looked 1) stocks with high dividend yield; 2) low or no account setup fee; 3) low initial purchase (<$1,000) and low subsequent purchase minimum; 4) no subsequent
purchase fee; 5) and low stock sell fee.

Posted by Sun
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