Guide To DRIPing

By Category: Dividends, DRiP | 34 comments

Guide To DRIPing

A recent article by ‘The Weathly Canadian’ along with the comments had me reflect on the reasons I DRIP (Dividend Reinvestment Plan) and the conditions under which I DRIP. No investor scenarios are equal so it’s important to understand the benefits and what it means to your portfolio when you DRIP.

Before looking at different DRIP strategies and the benefits, let’s review the 2 different DRIP options.

Ways to DRIP

Full DRIP

For lack of better term, Full DRIP refers to the Dividend Reinvestment Plan offered by the companies and managed by Transfer Agents such as Computershare and CIBC Mellon. Those plans allow you to participate in their Optional Cash Purchase (when offered) and to enrolled in the DRIP plan at no fees. Dripprimer.ca has a full list of all Canadian companies that offer Full DRIP.

Pros:

  • Optional Cash Purchase (OCP) at no fees
  • Available Discount on Dividend ReInvestment Plan (DRIP)
  • Fractional Shares for both DRIP and OCP

Cons:

  • OCP purchases at pre-determined times – You can’t time your purchases

You have the option

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Dividend Investing With a 10/10 Rule

By Category: Compound Interest, Dividends, DRiP | 29 comments
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Image via Wikipedia

I was watching the guest interview of Tom Cameron on Business News Network this past week where he highlighted the 10/10 rule utilized by his investment firms. It is very pertinent to dividend investors since it’s all about the dividend growth. In fact, 10/10 stands for a company that increases dividends for 10 consecutive years with an average of 10% or more growth in dividends per year.

10/10 Strategy

It’s a simple screening test really. You can follow this process of elimination.

  1. Identify companies that have paid dividends for the past 10 years.
  2. Identify the companies that have increased their dividends by an average of 10% per year for 10 years.

Rather than focusing on the yield, it focuses on the dividend growth to accelerate compound growth. A consistent growing dividend under a DRIP could double your holdings in a good

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Reasons for Investing in DRIP Programs

By Category: DRiP, Investing | 7 comments

The following is a guest post by Forex Traders

The past eighteen months have been nothing short of a rollercoaster ride for investors in our security markets.  The influences of a European debt crisis, flights of capital to safe havens, lack luster recovery efforts in the advanced economies of the world, and upward spiraling inflation in our commodity markets have been a few of the “lessons” included during this period of uncertainty and volatility.

While economists are predicting more of the same for the next decade, the investor that does not enjoy the “thrill” of a wild amusement park ride has more reasons that ever to consider the wisdom of investing in corporate dividend reinvestment programs, or “DRIP’s” as they are commonly called in the investment community.  The process involves registering with a company that offers a “DRIP” and then allowing this wealth accumulation strategy to work to your advantage.  There are obvious benefits of not having to pay brokerage fees, dollar-cost averaging, and owning fractional shares, but there are also other larger advantages to consider, as listed below:

1)    Total Return:  Nearly every beginning investor believe that their increase in wealth will come from wise stock selection

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TSX60 Index: Who is in it?

By Category: Dividends, DRiP, Investing | 6 comments

The TSX60 is an index that tracks the 60 largest companies trading on the Toronto Stock Exchange as measured by market capitalization. Those are the heavy hitters in Canada and I was curious of their dividend yields and which ones are also part of the Canadian Dividend Aristocrats.

I have crossed referenced the Dividend Aristocrats in green below that are present in the TSX60 for a total of 18 companies. If the banks had not dropped out recently, there would more.

TSX60 Index

Company Name Ticker Quote Yield Market Cap Royal Bank of Canada RY.TO $54.33 3.68% 77.43 Toronto-Dominion Bank TD.TO $76.11 3.21% 66.86 Suncor Energy Inc SU.TO $41.61 0.96% 65.03 Bank of Nova Scotia BNS.TO $57.43 3.41% 59.90 Potash Corp of Saskatchewan POT.TO $181.20 0.15% 51.53 Canadian Natural Resources CNQ.TO $44.95 1.33% 48.91 Barrick Gold Corp ABX.TO $47.84 1.02% 47.65 Imperial Oil Ltd IMO.TO $44.00 0.91% 37.29 Teck Resources Limited Subvtg B TCK.B $62.42 0.96% 36.80 Thomson Reuters Corporation TRI.TO $40.52 2.86% Continue reading TSX60 Index: Who is in it?

Dividend Investing: My no fee DRIP list of dividend stock is complete

By Category: Asset Allocation, CIBC Mellon, Computershare, Dividend Terms, Dividends, DRiP | 14 comments

Dividend Investing: My no fee DRIP list of dividend stocks is completeImage by alancleaver_2000 via FlickrLast year around May I started building my DRIP portfolio with Computershare and CIBC Mellon to slowly grow my dividend investment portfolio with no fees while leveraging the benefits of fractional shares. I have been sharing my process along the way and I recently completed the list of stocks I wanted to hold for now.

With many making new year’s resolutions around money and investment, I thought it would be a good time to share my list and why I picked them. I have to admit that reading The Lazy InvestorDividend Investing: My no fee DRIP list of dividend stocks is complete from Derek Foster kick started my official dividend investment journey. I already had dividend investments and was aware of it, but I did not know I could do it

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