There’s been a lot of action in the DRIP (dividend re-investment plan) environment recently with a large number of companies rushing to offer DRIP plans to investors and/or promote their DRIP plans with attractive discounts as conserving cash becomes vital.
In one example Canadian banks such as Royal Bank (RY), Bank of Montreal (BMO) and TD Bank (TD) have recently updated or initiated DRIP plans for their investors and an every growing number of Canadian dividend stock paying companies are following suit.
I want, with the help of readers and investors, to create The Ultimate DRIP-folio; a diversified portfolio of stocks that have eligible DRIPs. This portfolio could be the standard among all investors interested in constructing a portfolio that takes advantage of DRIPs and compounding returns over the long-term.
If you’re interested in participating submit in the comments section your top five CDN eligible DRIP stocks, with the details (discount, DRIP or SPP, etc), and I will compile a list and publish it on my site for future discussion of which stocks to include in The Ultimate DRIP-folio and why.
Here’s a list to get readers started:
My top 5:
Bank of Nova Scotia (BNS)
Manulife Financial Corp (MFC)
Penn West Energy Trust (PWT.UN)
Enbridge (ENB)
Telus (T)
I presume DRIP is not possible for people overseas? Europe etc.
Investor: I know that non-residents can enrol in DRIPs through a NA brokerage if they hold NA stocks. As for Europe or International stocks I haven't enquired if they have DRIPs, but we can certainly make The Ultimate DRIP-folio international if readers know of companies that offer DRIPs. There are a lot of US companies that do.
I don't like a lot of those DRIPs because of the high minimum optional cash payments. My vote for my top 5 fave Canadian DRIPs:
-BMO
-TransCanada
-Telus
-Enbridge
-Scotia
there are many other great ones, though! I also don't count the ones that don't have "full" DRIP plans that are offered directly through the company. If it's just reinvesting divs through the broker itself, that doesn't count to me.
The ultimate goal for DYI at no cost is DRIP & SPP (share purchase plan, or the way it is called sometime OCP – Optional Cash Purchase).
Excellent resources with regular updates
http://cdndrips.blogspot.com/
In no particular order: TD, FTS, TRP, RET, T
A negative to stocks like MFC for charging to enroll in the DRIP.
One other point, income trust DRIPS tend to make me nervous. If everyone in a DRIP converted to cash would it push its payout ratio over 100%?
I don't see why an overseas investor would not be able to participate in a DRIP program. I myself DRIP all my Canadian and American shares and I'm a non-resident; however European companies that sell as ADRs in the US do not offer DRIP programs to investors.
Brad, I'm not sure why you haven't included POW, PWF, IGM or GWO in your list.
It would be interesting to compare your results against a simple market-cap-weighted basket of stocks with DRIPs.
I agree with naminal – the best list of Canadian DRIPs is at http://cdndrips.blogspot.com/