Where to Buy DRIP Stocks
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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:
- ComputerShare: Domestic stocks only and you can find many blue-chip stocks
- The Bank of New York Investor and Client Service: Offer both domestic stocks and ADRs
- StockSelector.com
- DirectInvesting.com
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Hey Sun,
Good call on the DRIPS, don’t forget about amstock.com, they do direct purchase and DRIP programs also!
-James
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
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.
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.
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?
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
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.
I suggest http://www.directinvesting.com. The purpose of DRIP is so that you don’t have to use a stock broker. Most of these companies that allow you to purchase these DRIP stocks don’t ever transfer the shares into your name. This is a problem because this truly does defeat the purpose. With directinvesting.com, they do all the legwork to get an account open in your name at the companies. You buy at least a single share of stock (or as many as 100 shares) from them. Then they get YOU on the books and records of the company as a shareholder and after that you can invest in the company directly if you want to buy more shares—WITHOUT GOING THROUGH A BROKER!!!!! http://www.directinvesting.com TRY IT & SEE!!
Yazmyn: I mentioned directinvesting.com in my post, which is one place to buy DRIP stocks. If you want to get DRIP started, you can just buy one share of the stock from a broker, then have it transferred to a DRIP provider.