# DRIPs (Dividend Reinvestment Plans) - news and updates



## MoneyEnergy

Just wanted a place to keep up to date on DRIP news, cancellations, changes, etc. What's your favorite DRIP? 

Any news on DRIP plans in Canada?


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## moneygardener

Latest change to one of my DRIPs was Royal Bank's 3% discount.

http://www.rbc.com/newsroom/2009/0226-plan.html

I currently DRIP:
Johnson & Johnson
Telus
Royal Bank
Manulife


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## Max

In the fine print, I found out it not so easy to invest in DRIPs through my brokerage. I am with CIBC Investors Edge, and in order to qualify for the 3% discount on reinvested dividends, I would have to register my shares (at a hefty fee). I found out that CIBC's automatic enrollment plan really just takes the cash you receive from the dividend and reinvests it at the market rate.

I am a little nervous about the loss of control on the market price of my contributions if I just send them a cheque to buy shares directly. I do not really want to make regular contributions to the DRIP, I would rather just contribute a lump sum and forget about it.

What is the best strategy to make an initial investment in the DRIP?


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## bgc_fan

Max said:


> In the fine print, I found out it not so easy to invest in DRIPs through my brokerage. I am with CIBC Investors Edge, and in order to qualify for the 3% discount on reinvested dividends, I would have to register my shares (at a hefty fee). I found out that CIBC's automatic enrollment plan really just takes the cash you receive from the dividend and reinvests it at the market rate.
> 
> I am a little nervous about the loss of control on the market price of my contributions if I just send them a cheque to buy shares directly. I do not really want to make regular contributions to the DRIP, I would rather just contribute a lump sum and forget about it.


I was pretty much in the same situation. Personally, I find that a one-time cost to register the stock ($31.80, last time I did it with CIBC) isn't that onerous. I picked up a number of stocks, so I have a small portfolio of them, but haven't made any extra purchases lately (mortgage taking its toll). At any case, I let the dividends take care of themselves and I don't really bother with them. Even if I don't have the extra money to purchase more, at least the dividends are taking advantage of the current stock prices. My thoughts on the matter are that if I have the extra money, I'll send a cheque and purchase more of an undervalued stock.

As for DRIP news, BMO now offers a 2% discount on reinvested shares, not on cash purchases:
https://www-us.computershare.com/in...erid=scusbmoq&landing=y&showinvestorcontact=y


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## MoneyEnergy

If you make a large enough initial lump sum purchase of your future DRIP stock, then the time it will take to fully make back that outlay will be much less. Eg:

$52.00 certificate fee
$29.00 commission fee (using Waterhouse prices, here)
=$81.00

If you're able to buy $2000 of Scotiabank up front, that gets you about $28 with each dividend payment (assuming about a $35 share price, not sure what it's at right now). So in less than a year, you'll have your initial outlay back - and probably sooner, once they start bringing in dividend increases again. Obviously this can happen sooner the more you're able to purchase up front. With stocks that have discounts, it happens even sooner. Enbridge is great for that.


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## MoneyEnergy

I currently DRIP:

Scotiabank
BMO
Telus
Enbridge
TransCanada
Imperial Oil
Suncor
BCE
TransAlta
Bell Aliant
CIBC...

I have about 20 or so. This is in addition to stocks I have at the broker.


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## Cal

Yep. Same fees as MoneyEnergy, I used TdWaterhouse to make initial purchase.

After that, if the company has a SPP then only takes a few payments to save on the stock repurchase fees that you would have paid to the bank anyways.

Has anyone bought MFC since they changed their DRIP structure? I haven't yet, but m considering now that it has much lower DRIP fees.

Hoping for this market to ease up a bit to buy at a better price....


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## Jon202

rookie888 said:


> Has anyone bought MFC since they changed their DRIP structure? I haven't yet, but m considering now that it has much lower DRIP fees.


I just picked up my starter in from a group buy and sent in the paper work at the start of the week. I think I just missed the div record date.


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## Dave

I have ENB, TRP, SU, CGI, BMO, BNS & CM. I picked up my first shares from others who already had drips and who transferred them to me. The entire process takes a lot of patience. There is a wealth of information on drip forums if you are interested. I especially like the fact that you can get started with small sums and the dividends are re-invested automatically unless otherwise specified. 

Dave


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## FinancialJungle

Been dividend investing for several years now, but still very reluctant to DRIP. It's a little bit of an oxymoron, I think. Presumably we stock pick to buy excellent businesses at excellent discounts. 3% off market price usually doesn't spell enough of a discount, and the 3% discount is only available at the expense of dilluting existing shares. Plus the amount of effort required to track ACB just isn't compensated by the discount on the marginal purchases. The way I do it is to pool all my dividend earnings together and plow them into 1 or 2 purchases.

Not to dismiss all companies that offer DRIP, but the concept of DRIP, in some isolated cases, is a PONZI scheme; selling shares to fund dividends to existing shareholders. I much rather see my businesses raise capital only when capital is cheap, when share prices are over-inflated.


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## Brad911

FinancialJungle said:


> ...It's a little bit of an oxymoron, I think....The way I do it is to pool all my dividend earnings together and plow them into 1 or 2 purchases.


That's my approach as well. I believe that I am better capable to allocate capital into any undervalued or underexposed positions in my portfolio than simply allowing the DRIP to reinvest all my dividends from that company on a specific date each quarter. The discount is nice, but in the accumulation phase of my portfolio construction I am much more focused on building strong positions than receiving a slight discount that I can easily overcome with a lower LO in the open market over a period of 2-3 days.


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## Cal

I just posted this in response to a Taxation thread on TFSA's but I figure some of the people who check out the DRIP threads may have more info on this, so any help or input would be appreciated.

I would like to buy Arc Energy Trust AET.UN and set up a DRIP. Does anyone know anything about doing this?

I use TD Waterhouse as my brokerage, and already DRIP ENB through a non registered account so I am familiar with the process.

If I buy 5K of AET.UN through a TD TFSA (which will clearly show a record of a 5K transaction), is it the same process to get the share registered (ie: buy a share certificate)?

And then the next question is, next year, when I go to buy another 5K, do I send the cheque to Computershare ? (aware that the SPP maximum monthly purchase is 3K for AET.UN, so I know this would have to be purchased over the course of 2 months)

I just want to get my fractional shares....


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## Jon202

Brad911 said:


> That's my approach as well. I believe that I am better capable to allocate capital into any undervalued or underexposed positions in my portfolio than simply allowing the DRIP to reinvest all my dividends from that company on a specific date each quarter. The discount is nice, but in the accumulation phase of my portfolio construction I am much more focused on building strong positions than receiving a slight discount that I can easily overcome with a lower LO in the open market over a period of 2-3 days.


That's perfectly fine. But drippers don't really about one particular purchase price, as most buy regularly over a long period of time. I buy small amounts of all my holdings over the course of the year for no fees other than a stamp. The shareprice doesn't concern me, it's the rising dividends. Sure, I know the typical argument that div are only 1/2 of returns, but compounding of the reinvestment is a long term process.


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## Jon202

rookie888 said:


> I just posted this in response to a Taxation thread on TFSA's but I figure some of the people who check out the DRIP threads may have more info on this, so any help or input would be appreciated.
> 
> I would like to buy Arc Energy Trust AET.UN and set up a DRIP. Does anyone know anything about doing this?
> 
> I use TD Waterhouse as my brokerage, and already DRIP ENB through a non registered account so I am familiar with the process.
> 
> If I buy 5K of AET.UN through a TD TFSA (which will clearly show a record of a 5K transaction), is it the same process to get the share registered (ie: buy a share certificate)?
> 
> And then the next question is, next year, when I go to buy another 5K, do I send the cheque to Computershare ? (aware that the SPP maximum monthly purchase is 3K for AET.UN, so I know this would have to be purchased over the course of 2 months)
> 
> I just want to get my fractional shares....



You're confusing the TFSA with a traditional DRIP. Yes, I believe you can order a cert from a TFSA brokerage account, but that would be a withdrawal and the room wouldn't be re-attributed back to the account until the following year.

Essentially you need to be a registered shareholder of ARC, be it 1 share or 1000, then you can sign up for the DRIP & UPP.


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## Cal

Sorry Jon202 (and anyone else), if I wasn't clear.....

I want to set up a holding of AET.UN within my TFSA. As I understand it I would transfer $5000 into the TFSA, then would purchase roughly $4970 worth of AET.UN, with approximately a $30 transaction fee. I believe I can order the share cert. and pay for that with money outside of the TFSA, as it isn't part of the investment, it is merely needed to register it under myself.

From that I would obviously be able to contact Computershare to set up the DRIP. I was just wondering if anyone else out there had set up a DRIP within their TFSA, and if so how the process went.

Which then makes me wonder a year ahead, as if the DRIP is set up, then I could use the SPP to purchase next years $5000 TFSA limit also, avoiding the $30 transaction fee through TD Waterhouse. (and I know that AET.UN has a $3000 SPP monthly maximun, so it would have to be done over the course of 2 months) But for tax purposes, how would Revenue Canada know that the intention of the 2nd years $5000 was to be held in the TFSA?


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## Jon202

Sorry to repeat, but you're confusing the TFSA with a Traditional DRIP. A Traditional DRIP is a non-registered/taxable holding, where you need to be a registered shareholder.

I suggest you read through my pages, esp. the DRIP FAQ page to understand the difference between traditional DRIPs and synthetic DRIP. See the link in my signature.


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## FinancialJungle

Jon202 said:


> I buy small amounts of all my holdings over the course of the year for no fees other than a stamp.


Investors who reinvest dividends without using DRIP generally piggyback on purchases from regular savings. In practice, my dividends are reinvested without incurring any additional transaction fees. 



> The shareprice doesn't concern me, it's the rising dividends. Sure, I know the typical argument that div are only 1/2 of returns, but compounding of the reinvestment is a long term process.


Both entry price and dividend growth determine the portfolio return. Anyhow, reinvesting dividends outside of DRIP doesn't sacrafice the dividend growth component.


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## Cal

Jon202 said:


> Sorry to repeat, but you're confusing the TFSA with a Traditional DRIP. A Traditional DRIP is a non-registered/taxable holding, where you need to be a registered shareholder.


Again I already DRIP ENB in a non registered account. So I am familiar.

So what you are saying is that a TFSA can only hold a synthetic DRIP, not a traditional DRIP, which would answer my question about, how to ensure that your contribution for year 2 of your TFSA contribution gets registered. (answer - 2nd years shares are purchased through broker just like 1st year - got it)

Too bad, that we can't get the fractional shares....that would have been nice.

Ahh well, at least the TFSA is a good vehicle to hold the Trust from a tax perspective.


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## Spidey

I also wonder with today's low commissions if DRIPing is worth it. It may have been when commissions were perhaps $45 per trade, but now at $9.99 there is less of an incentive for me to DRIP.

Some advantages I find to not DRIPing are:

- Keeps things simple for accounting purposes. I buy 100 shares and sell 100 shares. ACB is just the difference in price + commissions.

- I think getting the dividend in cash makes things a little more transparent. For example, on my Novartis shares, I noticed that the Swiss government hits Canadians with a big withholding tax. I may have been less likely to notice, if I had a DRIP program in place.

- As others pointed out, I can determine where to put my dividends. Perhaps my stock is overvalued at the moment - so why should I buy more? Depending on the market, I usually put my dividends either in cash or a low-MER index fund until I have enough and the time seems right to consider buying more stock (often a different stock).

- I can use the dividends to help rebalance my portfolio, rather than selling stock.


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## Jon202

Spidey said:


> I also wonder with today's low commissions if DRIPing is worth it. It may have been when commissions were perhaps $45 per trade, but now at $9.99 there is less of an incentive for me to DRIP.
> 
> Some advantages I find to not DRIPing are:
> 
> - Keeps things simple for accounting purposes. I buy 100 shares and sell 100 shares. ACB is just the difference in price + commissions.
> 
> - I think getting the dividend in cash makes things a little more transparent. For example, on my Novartis shares, I noticed that the Swiss government hits Canadians with a big withholding tax. I may have been less likely to notice, if I had a DRIP program in place.
> 
> - As others pointed out, I can determine where to put my dividends. Perhaps my stock is overvalued at the moment - so why should I buy more? Depending on the market, I usually put my dividends either in cash or a low-MER index fund until I have enough and the time seems right to consider buying more stock (often a different stock).
> 
> - I can use the dividends to help rebalance my portfolio, rather than selling stock.


You're points are all true spidey, except that most if not all "traditional drippers" are not in the same boat.

First, regarding trading commissions, most if not all drippers can't/don't start out with the $1000 or $5000 required to open an account. Getting a single share with a value of $20-$30 is all that's required, then future purchases are still commission free. Also, according to a survey on another DRIP board, more than half of drippers send less than $200/month on OCPs. Even at $9.99 per trade, with others in the $20-30 range, that'd be %5-10 or more eaten up by fees. Market timing isn't really considered, rather long term dollar cost averaging is.

Secondly, regarding buy and selling for taxes, you're right. Though most if not all drippers do not consider ever selling their holdings so long as they still meeting their objectives (consistent/rising dividends). So it's not a concern. Also, most drippers use a simple spreadsheet to input purchase amounts and reinvestments to keep track of cost base if ever needed. This takes me 5min a month max.

And you're 3rd point is very accurate for drippers with years of holdings, and something I'm considering doing soon. Say I have 10 DRIPs of varying sizes and payments. With dripping you can always "turn off" the DRIP and have the cash deposited in an a free chequing account and redirect those funds to your smaller drips with more free OCPs to balance out your holdings.


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## FinancialJungle

Jon202 said:


> First, regarding trading commissions, most if not all drippers can't/don't start out with the $1000 or $5000 required to open an account.


Should someone with a $5000 portfolio be DRIPing or simply buying an index ETF? It costs just $9.95 in commissions to buy XIU, but $49.75 to buy 5 dividend stocks. The extra charge is far greater than the amount of DRIP savings on a $5000 portfolio. Assuming the portfolio yield is 5% and a DRIP discount of 3%, that's only $5000 x 5% x 3% = $7.5 of savings per year. Penny-wise pound-foolish?

Secondly, there's the piggybacking concept. The investor starts off the first year with $5000. Second year, he receives $250 in dividends and another $5000 from new savings. He can then piggyback the $250 on his $5000 to buy new shares, effectively wiping out any commission costs on the dividend reinvestment.


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## Jon202

FinancialJungle said:


> Should someone with a $5000 portfolio be DRIPing or simply buying an index ETF? It costs just $9.95 in commissions to buy XIU, but $49.75 to buy 5 dividend stocks.


Not true for traditional drippers. It would cost 5 stamps to buy and setup 5 drips, well, maybe 10 stamps since some companies require paperwork mailed in.

No brokerage, and in turn brokerage fees, required to to start dripping. I have 8 drips and 1 U.S. drip and used my old brokerage account for only 4 of them.

Not to dismiss synthetic dripping or passive/index couch potato investing, as many traditional drippers invest that way too.


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## FinancialJungle

Jon202 said:


> No brokerage, and in turn brokerage fees, required to to start dripping. I have 8 drips and 1 U.S. drip and used my old brokerage account for only 4 of them.


To go from $5000 cash to dripping, one has to buy the stocks first, and buying costs brokerage fees. I was comparing buying $5000 of XIU versus splitting the cash to buy 5 DRIP stocks.


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## Jon202

FinancialJungle said:


> To go from $5000 cash to dripping, one has to buy the stocks first, and buying costs brokerage fees. I was comparing buying $5000 of XIU versus splitting the cash to buy 5 DRIP stocks.


Nope, no brokerage fees involved in traditional dripping. Broker's synth DRIPs yes, but traditional DRIPs no. 

Anyone with $5000 in a chequing account could easily acquire 5 starter shares for maybe a few dollars (give or take, depending..), and send off OCPs of $1000 for each one and fractional shares down to the .001 of a share would be purchased.

But yes, you are correct, 1 trade commission is less than 5 trade commissions if one was setting up synth DRIPs.


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## Jon202

*Canadian Oil Sands Suspends DRIP/UPP*

Canadian Oil Sands Announces Suspension of Distribution Reinvestment Plan

Effective Q3

http://www.marketwire.com/press-release/Canadian-Oil-Sands-Trust-TSX-COS.UN-1007999.html

Jon


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## canabiz

Hello, i recently opened an account with Questrade and picked up some dividend-paying stocks. I am looking to DRIPs them and I understand we can buy 1 share from another individual to get the process going.

Could somebody please let me know if this is feasible? I have applied for membership with the Ottawa Share Club and I have also checked out the forum at the DRIP Resource Centre for more info.

Thanks.


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## Jon202

canabiz said:


> Hello, i recently opened an account with Questrade and picked up some dividend-paying stocks. I am looking to DRIPs them and I understand we can buy 1 share from another individual to get the process going.
> 
> Could somebody please let me know if this is feasible? I have applied for membership with the Ottawa Share Club and I have also checked out the forum at the DRIP Resource Centre for more info.
> 
> Thanks.


You're confusing a synthetic DRIP with a Traditional DRIP. Please see my pages in my signature to help you out.

Ottawa DRIP club is meeting in 3 weeks, check the group pages for more details.

Jon


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## canabiz

Jon202 said:


> You're confusing a synthetic DRIP with a Traditional DRIP. Please see my pages in my signature to help you out.
> 
> Ottawa DRIP club is meeting in 3 weeks, check the group pages for more details.
> 
> Jon


Thanks, I am still waiting for approval to join the Ottawa DRIP club.

I guess my question boils down to: Should I suck it up and pay $200 to get 1 share certificate from Questrade (I need 3 certificates so that is $600 right there) and do the Synthetic DRIP or should I sell those shares, take the money out, buy 1 share via private exchange and start the traditional DRIP?

I will then acquire additional shares of said companies via SPP.

I will continue to keep my Questrade account to buy and sell other stocks, dividend-paying (without DRIP) and/or non-dividend paying. 

Happy Canada Day to all!


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## Jon202

God no, do not pay Questrade's cert. fee. My pages explain your options and costs if you want to go the traditional route. If you want to go the synthetic way, you can with Questrade.

There's nothing formal about the Ottawa group, that's just they way google groups functions to access the mailing list/website.


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## Cal

Yeah, $200 for a share cert......that's criminal.


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## Jon202

*DRIPs drop discounted shares in your lap*

DRIPs covered in the Globe and Mail today:

http://www.theglobeandmail.com/glob...discounted-shares-in-your-lap/article1218651/


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## CanadianCapitalist

A permanent link to the column Jon points to can be found here:

https://secure.globeadvisor.com/servlet/ArticleNews/story/gam/20090715/RCLINIC15ART1915


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## Cal

Update SIF.UN is now JE.UN


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## MoneyEnergy

*Don't forget certificate fees*



Jon202 said:


> Not true for traditional drippers. It would cost 5 stamps to buy and setup 5 drips, well, maybe 10 stamps since some companies require paperwork mailed in.
> 
> No brokerage, and in turn brokerage fees, required to to start dripping. I have 8 drips and 1 U.S. drip and used my old brokerage account for only 4 of them.
> 
> Not to dismiss synthetic dripping or passive/index couch potato investing, as many traditional drippers invest that way too.


You're not forgetting certificate fees, are you? Unless you get your first share "gifted" to you or transferred from someone else.... sure. I didn't know any other drippers when I started, so I paid for all the certs! Thankfully they've more than paid that off by now though.


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## Jon202

MoneyEnergy said:


> You're not forgetting certificate fees, are you? Unless you get your first share "gifted" to you or transferred from someone else.... sure. I didn't know any other drippers when I started, so I paid for all the certs! Thankfully they've more than paid that off by now though.


You are correct, I did the same thing not knowing my options. That is why I encourage and share information with as many people as I can on my DRIP Primer site about other options (DRIP Clubs, exchange boards, group buys) to reduce those initial startup costs.


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## Jon202

Canadian Western Bank (TSX: CWB) Introduces DRIP only plan with 2% discount.

http://www.cwbankgroup.com/investor_relations/drip.htm


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## MoneyEnergy

Recently I'm changing some of my DRIP strategy. I've realized the risk involved with electing to have 100% of your dividends reinvested in the same company. Just a few thoughts here:

1) It's poor diversification
2) the company can buy back shares or issue more, both change your value
3) the amount of shares represents "nominal" value: it can change

it seems to me that if you have 100% reinvested, it won't necessarily always compound in positive terms. Look at what happened to EIT.UN this past year.

Going forward I think I'm keeping my DRIPs for the SPP benefits, but from time to time I'm going to "take some off the table" so that I have access to the cashflow and can redeploy it so as to better control diversification and protect the returns.


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## Cal

Progress Energy PRQ:TSX has set up DRIP program, announced Aug. 28th


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## Jon202

Cal said:


> Progress Energy PRQ:TSX has set up DRIP program, announced Aug. 28th


With a 5% discount on reinvested price. No share purchase plan.


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## Jon202

Iconic Tim Hortons finally moves from DRIP Coffee to DRIPs and SPP, though with relatively high fees:

http://www.dripprimer.ca/timhortons


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## DavidJD

My favourite EIF (Exchange Income Corp - which WAS an income trust and is a corp now) has set up a DRIP at -3% off the averaged market price. Even at their 52 week high yesterday ($14.10) the yield is still over 11% and TDW has a 'Strong Buy' rating. I am a big fan of this one.


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## CanadianCapitalist

Jon202 said:


> Iconic Tim Hortons finally moves from DRIP Coffee to DRIPs and SPP, though with relatively high fees:
> 
> http://www.dripprimer.ca/timhortons


Tim Hortons gotta be joking. Many companies provide a discount for investors participating in their DRIP. Tims charges a 5% fee! Why even bother with a DRIP if you are going to be so shareholder unfriendly?


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## bean438

They do it because they can. Just as people will wait in line for 20 minutes for a mediocre cup of coffee, so to shall they enrol in Timmies drip program.


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## Cal

why even have a program if you are going to do that to your share holders.


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## Toronto.gal

Manulife had similar charge at first also, but it was later dropped.


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## Cal

Any thoughts from anyone about SLF and REI.un potentially cutting dividends this year?


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## dilbert789

Cal said:


> Any thoughts from anyone about SLF and REI.un potentially cutting dividends this year?


SLF's dividend payout ratio is 153% right now according to 'DividendInvestor.ca' So I wouldn't be all that surprised. However it would kill their 4 year consecutive increases, which would probably have a big negative on the stock price.


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## Cal

http://seekingalpha.com/article/208067-9-stocks-with-sustainable-dividends?source=email

US article.


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## Cal

Good article on a dripping in todays G&M:

http://www.theglobeandmail.com/globe-investor/dripping-your-way-to-wealth/article1627145/


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## Cal

Its not really a dripping article, however it does have alot of examples of how fees cut into your profits.

http://www.theglobeandmail.com/glob...returns-let-us-count-the-ways/article1646632/

I am beginning to think that I am the only dripper that goes on this forum.


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## Belguy

Did you say drip---per??


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## Jungle

Is there a list somewhere of all the companies that allow dripping directly through the company? (Not brokerage drip)


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## CanadianCapitalist

http://www.dripprimer.ca/ is an excellent resource. It has a list of Canadian companies that offer DRIPs and SPPs.

http://www.dripprimer.ca/canadiandriplist


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## Cal

Basically only some American companies will allow you to invest directly with the company.

In Canada you have to do it through the transfer agent to avoid brokerage fees.

If you want to read up there are some great articles at www.dripinvesting.org


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## Jungle

Thanks guys, great links.


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## Addy

I've read http://www.dripprimer.ca/ and it seems the advantage, or at least one of the main advantages to a drip is no fee purchasing? I'm asking because it appears my drip (maybe it's a synthetic drip?) via qtrade has me paying no fees when my purchase is automatically done from the cash from dividends.

Can anyone please explain what I'm missing? Because I know I'm misunderstanding something, I just don't know what!


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## Addy

Ahh... should have read the faq's on that link  I answered my own question, FAQ #10 says it is a synthetic drip I have!


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## Cal

Synthetic drips will only repurchase whole shares, plus whatever leftover cash there is stays in your account.

Traditional drip, when you are registered with the transfer agent, allows you to use all of your dividend income to purchase shares. ie: you receive fractional shares, down to the very last penny of your dividend payment.


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## humble_pie

cal may i ask you as the resident drip expert.

i have a few treasury drips running in my registered accounts. I thought they were supposed to offer some sort of bonus - i thought this because one of the companies told me a couple years ago that they rebate something like 2-3% to the brokers to run the drip programs and, the IR rep said, some brokers pass this on to clients & some don't - but i see in my case the broker is crediting each dividend at its declared value & then buying as many new shares as will fit.

to my surprise the same stock at the same broker paying cash divs in non-registered account is giving me a dividend bonus of .0046 per share - about half a penny per share - over & above the declared div amount.

it's saturday, brokers' back offices are closed so there's no resources for the front line reps. Would you know why such a thing could be happening.

i have about 1000 sh in the rrsp so it's about $60 per annum that i'm missing. On the other hand, the convenience & efficiency of always having rrsp dividends reinvested is probably more than worth the tiny loss.


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## humble_pie

amazing what a little digging will turn up.

the company whose dividends were puzzling me is crescent point. The declared dividend is .23/month. Recently i noticed that i've been receiving .23 for shares held in rrsp and .2346 for shares held in non-registered accounts.

cpg has those kind of mind-numbing documents on its website - the kind written by lawyers - that explain what's going on. It boils down to the company offers 5% discount from market prices (over a specified period of time) for reinvested dividends. That is a very healthy discount.

meanwhile, for investors who choose cash dividends and whose stock is held in nominee ie at the broker, the company unevenly splits this 5% between the investor and the intervening broker, offering 102% of the dividend to the investor and about 3% to the broker as a reward for the services it has to perform.

not that the broker is sitting back & slurping up its 3% with no effort. Apparently (extremely complicated legalese here over which i raced) the broker has to pre-buy shares representing anticipated amount of aggregate cash divs for all of its clients, then sell these shares in order to raise the cash ... there's some risk for the broker ... so i guess they're entitled to their 3% ... and the client winds up with 102% of the declared dividends.

on a sunday i have no way of checking whether my rrsp dripped shares in cpg were indeed bought at 95% of average market price over the price period (company's documentation has a mind-numbing legal definition of how to establish the price period.) Out of curiosity, i might check next week when back office operations are open mon-fri. But i tend to think to think that yes, all the dripped rrsp shares were bought at 95% discount. The broker has a long record of behaving decently towards its clients.


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## Sampson

Thanks for the post humble.

I've always wondered, but effectively never cared enough to both, like you I have a few holdings where I was receiving the discount, and others not.


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## cardhu

Cal said:


> I am beginning to think that I am the only dripper that goes on this forum.


I've been using DRIP for decades. Only in RRSP, though ... never in taxable account.


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## Cal

Glad you got it figured out!

Alot of the companies that offer drip plans will also have on their websites the dividend payout per share, as well as the reinvested dividend share price for the quarterly or monthly dividend dates. Showing the 5% discount.


----------



## humble_pie

thanks that's good to know.

but do they all offer what the brokers call treasury drips with a 95% price ?

that's a bargain. It's a better deal than the investor being paid cash divs of 102%.

i suppose a drawback in taxable accounts is that the acb changes with every drip & the client must keep up the calculations ... although most brokers are providing the figs.

Q: what, do you suppose, prevents investor from selling - that is to say, shorting - his anticipated drip shares on the day of the price fixing, and then covering with the discounted shares he will receive a few days later (?) Surely he will harvest that 5% ...


----------



## Cal

www.dripprimer.ca and http://cdndrips.blogspot.com/ have good lists.

A. I had read about that in 'The little book of big dividends'....basically the price will reflect the opportunity. However I am sure that some of the quant's computers are all over those opportunities as well. It might be worth the read for you though. I have never taken the time to look and crunch the numbers to verify.


----------



## Cal

G&M article on dividends:

http://www.theglobeandmail.com/glob...in-limbo-dividends-become-key/article1657984/


----------



## Jon202

Another dividend article - always a in vogue subject when market returns are in doubt. This time Ellen Roseman:

http://www.thestar.com/article/842549--roseman-three-ways-to-invest-in-dividend-stocks


----------



## Belguy

Interesting posting of Ellen Roseman's column from today's Toronto Star.

As an ETF investor, I was particularly interested in the section on dividend ETF's, especially on the Claymore offering based on the S&P/TSX Dividend Aristocrats Index "which includes companies that have raised their dividends every year for the past five years.

"Trading under the symbol CDZ on the TSX, this ETF holds 56 securities. It has a management expense ratio of 0.6 per cent and a one-year return of 17.71% and offers a DRIP."

http://www.claymoreinvestments.ca/e...ed-funds/fund-details/fund-summary?ticker=CDZ

Does anyone have any thoughts on this particular ETF or would you prefer the iShares Dow Jones Select Dividend Index Fund (DVY) and why?

http://us.ishares.com/product_info/fund/overview/DVY.htm


----------



## Jon202

Belguy said:


> Does anyone have any thoughts on this particular ETF or would you prefer the iShares Dow Jones Select Dividend Index Fund (DVY) and why?


Well, can't really compare those 2, since once is Canadian listings the other is U.S. listings. Both use a set of criteria to maintain a list of constituents, but the Canadian criteria aren't as stringent as the U.S. one.


----------



## Cal

Lockheed Martin (NYSE: LMT) raises its quarterly dividend by 19% to $0.75 per common share. The dividend is payable on Dec. 31 to shareholders of record on Dec. 1. The ex-dividend date is Nov. 29.

The dividend yield moves from 3.50% to 4.17%.

This is the eighth straight year of increases for LMT.


----------



## Jungle

Can you do traditional DRIP in TFSA?


----------



## Jungle

If you buy shares through the SPP, how do you sell them?


----------



## Cal

In your TFSA you can only set up a synthetic drip. If you have purchased an equity that offers a discount on your dripped shares, most brokers will pass the discount along, you just need to ask them to.

So no SPP or OCP within a TFSA. Everything in a TFSA has to be done through the broker so that the TFSA annual maximums can be by the gov't (you can't use the transfer agent as with traditional drip).


----------



## Jungle

Cal, don't you mean that only _synthetic drip_ is available in TFSA? I will ask Questrade if they pass the discount along. 

Questions, if you don't mind:

1. What happens if I buy some shares though SPP, then I want to sell them some day? Since there is no brokerage, how do you sell them? 
2. I own shares of TransAlta in Questrade. How do I start a drip and SPP?


----------



## Cal

Yes. Synthetic drip in TFSA. Thanks for the correction.

Most questions can be answered on the www.dripinvesting.org site.

1. You would generally call the transfer agent (Computershare or CIBC Mellon) request a share certificate, then take the share certificate to your bank/broker where they could register them there, and carry out your sell order as requested.

2. You would call your broker, and request a share certificate, TD charges around $53 for one (basically the price of 2 more buy orders for more shares), that takes about 2 weeks to receive, then you would go to the company website (some companies will also mail you the forms) and print the forms for the DRIP program, SPP/OCP program and such, and I normally mail in a small cheque with those forms, just to make sure everything is set up properly for the next dividend payment time for the company.

Through the above mentioned website there is a share exchange board, where some trade shares, as well as group buys, where 1 person will buy 10 shares, pay one transaction fee, then deal with the transfer agent to get each of the other 9 shares registered to the other people in on the group buy. This cuts down on bank fees. I have never done this though. I have just paid the $53 to TD for the share certificate in my name.


----------



## Jungle

Thanks for your help, cal. 

Just some more questions:
1. Does the transfer agent accept ETF (electronic fund transfer) or bill payment to purchase more shares on the SPP? 

2. Also can you buy additional shares on any day within the allowed OCP frequency? For example, if they allow you to buy a minimum $100 per month, can I but on the 15 of one month, then the 25 of the next month, etc?


----------



## Jon202

Jungle said:


> Just some more questions:
> 1. Does the transfer agent accept ETF (electronic fund transfer) or bill payment to purchase more shares on the SPP?
> 
> 2. Also can you buy additional shares on any day within the allowed OCP frequency? For example, if they allow you to buy a minimum $100 per month, can I but on the 15 of one month, then the 25 of the next month, etc?


1.) No, only cheques accepted. Post-dating multiple is possible to set up a quasi-recurring purchases.

2.) No, the schedule to process OCP is fixed, usually 1st of the month, but there are some odd schedules like Manulife.


----------



## Jungle

Jon202 said:


> 1.) No, only cheques accepted. Post-dating multiple is possible to set up a quasi-recurring purchases.
> 
> 2.) No, the schedule to process OCP is fixed, usually 1st of the month, but there are some odd schedules like Manulife.


Thanks Jon202

I see you can't really take avantage of lower market price purchasing on certain days. But most have a discount anyway and through dollar cost avergaing, I guess it's not that bad.


----------



## Cal

It's not really and update, but it was an interesting read. CC mentioned it in his post today too.

http://myownadvisor.blogspot.com/2010/10/if-youre-dividend-investor-you-should.html


----------



## Cal

http://www.prnewswire.com/news-rele...inancial-and-operating-results-105756588.html

- Rogers repurchased 9.0 million RCI Class B Non-Voting shares for
$335 million during the quarter under our $1.5 billion share buyback authorization and paid dividends on our common shares totalling $187 million. Also, we plan to introduce shortly a new dividend reinvestment plan ("DRIP"), whereby Rogers investors are able to automatically reinvest their quarterly dividends to purchase additional Rogers Class B common shares. 

Tip from Jon on www.dripinvesting.org


----------



## Addy

I have a question about synthetic drips.... we have them set up via qtrade and when the dividend is reinvested there's no fee involved.... is there still an advantage for us going for a true drip? I've been reading some dividend sites but I couldn't find a clear answer.


----------



## andrewf

True DRIPs often offer discounts of 1-4% on share purchases. Also, you receive partial shares, whereas synthetic DRIPs only give you whole shares rounded down, with the remaining cash deposited in your account.


----------



## Toronto.gal

It has already been mentioned, but just as a reminder, a true DRIP also offers Stock Purchase Plan [SPP], which allows you to buy additional shares without paying any brokerage fees. Under synthetic drips, you would need to pay commissions every time you wanted to add shares.

List of Canadian companies offering DRIP's and SPP's:

http://sites.google.com/site/cdndrips/canadiandriplist


----------



## Cal

Telus is going to stop the 3% discount currently offered for DRIP participants as of March 2011.

5% dividend increase.

More detailed info is in the 3Q results/news release.


----------



## Cal

Has anyone read?

The Ultimate Dividend Playbook by Josh Peters

Any feedback before I read/buy?


----------



## ForgabhAnLa

*Synthetic within TFSA VS traditional*

Hi drippers,

Thx for all the great content.
I plan to start dripping and am not convinced that a traditional DRIP is that much better than a synthetic DRIP (assuming that the broker will pass down the discount).

I think I'm somewhat familiar with the pros and cons:

*Traditional*
+ Discount (SSP and Div reinvestment)
+ SSP at no fees
+ Fractions
- Lost of control/Diversification
- Paper hassle & front-fee
- Not within TFSA (Taxable)

*Synthetic*
+ Possible discount on reinvestment
+ Within TFSA 
+ No Cert required (no front fee)
- Fees when want to add stocks

I know that if you "never" sell the stocks, you don't need to worry about the capital gain, but I kind of think that the fact that the synthetic can in a TFSA seems to make it more interesting?

Do any of you have a clear position on this and maybe backed up with metrics?

Thx again for your help!
Tony


----------



## DavidJD

DavidJD said:


> My favourite EIF (Exchange Income Corp - which WAS an income trust and is a corp now) has set up a DRIP at -3% off the averaged market price. Even at their 52 week high yesterday ($14.10) the yield is still over 11% and TDW has a 'Strong Buy' rating. I am a big fan of this one.


Still amazed at how well this is doing. Another 52 week high today ($18.09) and even at this price the yield is over 8%.


----------



## Eclectic12

Cal said:


> Again I already DRIP ENB in a non registered account. So I am familiar.
> 
> So what you are saying is that a TFSA can only hold a synthetic DRIP, not a traditional DRIP, which would answer my question about, how to ensure that your contribution for year 2 of your TFSA contribution gets registered. (answer - 2nd years shares are purchased through broker just like 1st year - got it)
> 
> Too bad, that we can't get the fractional shares....that would have been nice.
> 
> Ahh well, at least the TFSA is a good vehicle to hold the Trust from a tax perspective.


Until some traditional DRIP companies decide there's enough interest to make it worth their while to file the paperwork with the gov't (or lobby effectively for the right) - then yes, only a synthetic DRIP is likely available in a TFSA. I'm not sure I'd hold my breath as most people I know are focussed on a savings account for the TFSA so there might not be enough demand.

As for synthetic DRIP, the non-registered account shares that I transferred into my TFSA continued to synthetic DRIP, right on schedule without missing a dividend. 

The only issue was that I forgot to consider the payment dates when I transferred, so I ended up with 99% of the shares in the TFSA and 2.2 Drip shares in the non-registered account. Another contribution fixed this issue but it was a bit of a pain for ACB calculations.


----------



## Eclectic12

Toronto.gal said:


> It has already been mentioned, but just as a reminder, a true DRIP also offers Stock Purchase Plan [SPP], which allows you to buy additional shares without paying any brokerage fees. Under synthetic drips, you would need to pay commissions every time you wanted to add shares.
> 
> List of Canadian companies offering DRIP's and SPP's:
> 
> http://sites.google.com/site/cdndrips/canadiandriplist


A *true* DRIP?

Hmmm ... eveything I've ever read has said that DRIP is diviendend re-investment, period. I have seen companies offer a DRIP without a SPP. This sort of one sided offering does not invalidate the DRIP - it just means it is not flexible and not to my liking.


----------



## Eclectic12

ForgabhAnLa said:


> Hi drippers,
> 
> Thx for all the great content.
> I plan to start dripping and am not convinced that a traditional DRIP is that much better than a synthetic DRIP (assuming that the broker will pass down the discount).
> 
> I think I'm somewhat familiar with the pros and cons:
> 
> *Traditional*
> + Discount (SSP and Div reinvestment)
> + SSP at no fees
> + Fractions
> - Lost of control/Diversification
> - Paper hassle & front-fee
> - Not within TFSA (Taxable)
> 
> *Synthetic*
> + Possible discount on reinvestment
> + Within TFSA
> + No Cert required (no front fee)
> - Fees when want to add stocks
> 
> I know that if you "never" sell the stocks, you don't need to worry about the capital gain, but I kind of think that the fact that the synthetic can in a TFSA seems to make it more interesting?
> 
> Do any of you have a clear position on this and maybe backed up with metrics?
> 
> Thx again for your help!
> Tony


First off, I'd call the first option "Preferred DRIP" as there are companies out that that don't offer a discount and in some cases, don't offer a SPP.

I'm also curious as to what you see as "loss of control/Diversification". If it refers to the automatic re-investment, this is true in both types. As for limited dates, this is also true for both types, with the exception of selling on any given day in the brokerage account that is providing the synthetic DRIP.

The "front-fee" is another question mark as in either variety, shares are required to be bought.

As for which DRIP is better (or if DRIP should be done at all) a key factor is your plan for the dividends. Some people don't want to spend time figuring out what to do with them so automatic re-investment of the full amount at no cost is appealing. Others value the ability to sell at any time but want to re-invest for whole shares. Others who prefer not to DRIP, research better investments and add the dividends to their other purchases.

At the end of the day, DRIPs are simply another tool that may or may not match your investment strategy/plans. Knowing your plans will help identify which is an advantage to you.


----------



## Eclectic12

Jungle said:


> Thanks Jon202
> 
> I see you can't really take avantage of lower market price purchasing on certain days. But most have a discount anyway and through dollar cost avergaing, I guess it's not that bad.


On a specific day basis, that is correct, from what the company DRIP/SPP specifics I've read (referred to as "traditional" in this thread). However, part of the theory is that the companies that are DRIP/SPP are blue-chip, dividend increasing stable ones. So over the long term, this is not a key concern. 

If timing is a concern, the brokerages have offered the synthetic version to hold onto their customers and make profits from those who don't ask for the discount. Some prefer the synthetic as they can then control the buy/sell dates as well as avoid the share registration in exchange for whole share re-investment only.


----------



## Toronto.gal

Jungle said:


> Thanks Jon202
> 
> I see you can't really take avantage of lower market price purchasing on certain days. But most have a discount anyway and through dollar cost avergaing, I guess it's not that bad.



True, the downside is that additional purchases can only be made on a set date, which normally coincides with the dividend payment date, but as you said, dollar cost averaging works well. However, if a stock I DRIP goes down significantly on any given day, I don't wait, I buy it, so for this reason I have synthetic and true DRIP plans. 

Note however, that the discount does *not* apply to the share purchase option plan, only to the dividend reinvestment option.


----------



## Toronto.gal

ForgabhAnLa said:


> *Synthetic*
> + Possible discount on reinvestment


I don't think discount brokers offer the discount, at least CIBC does not.

@edit: I spoke to CIBC and contrary to what I was told before, they said that they do in fact extend discount on dividend reinvestments for Canadian companies that offer them [though they made mistakes with some of my shares, so will have to carefully check those transactions].


----------



## Argonaut

Toronto.gal said:


> I don't think discount brokers offer the discount, at least CIBC does not.


I can confirm that RBC does. I am receiving discounts on Inter Pipeline re-investments.


----------



## Cal

Toronto.gal said:


> True, the downside is that additional purchases can only be made on a set date, which normally coincides with the dividend payment date, but as you said, dollar cost averaging works well. However, if a stock I DRIP goes down significantly on any given day, I don't wait, I buy it, so for this reason I have synthetic and true DRIP plans.
> 
> Note however, that the discount does *not* apply to the share purchase option plan, only to the dividend reinvestment option.


Check www.dripprimer.ca ...some companies do offer a discount on the Optional Cash Payments as well. ARX and TA come to mind.

Also..some banks pass along the discounts too. With TD I just had to mention it.

Canadian Dividend Aristocrat list:
http://www.thepassiveincomeearner.com/2011/01/dividend-aristocrats-canadian-tsx.html


----------



## Toronto.gal

Cal said:


> Check www.dripprimer.ca ...some companies do offer a discount on the Optional Cash Payments as well. ARX and TA come to mind.


Perhaps a select few may, but none of the ones I own do, nor do the ones you mentioned for that matter [I checked directly with the transfer agents]. But I sure would like to find/buy shares of any good company that gives the discount under all options!


----------



## Cal

Toronto.gal said:


> Perhaps a select few may, but none of the ones I own do, nor do the ones you mentioned for that matter [I checked directly with the transfer agents]. But I sure would like to find/buy shares of any good company that gives the discount under all options!


That is peculiar that they would tell you that, the ARX website (http://www.arcresources.com/en-ca/investorrelations/dripinfo.htm), has the following if you click on 'Drip Plan Information' and look under 'Purpose':

'The Dividend Reinvestment and Optional Common Share Purchase Plan allows eligible holders of Common Shares to conveniently purchase additional Common Shares by reinvesting their csh dividends to purchase Common Shares and fractional Common Shares equal to the amount of their monthly dividends and/or to purchase additional Common Shares between a minimum of $500 and a maximum of $3,000 per month. Under both programs additional Common Shares are credited to the participant's accounts at 95% of the prevailing market rate.'

It is possible that ARX has changed this with the conversion to the corp and has not yet updated the website accordingly.

The TA news release is linked below:

http://www.transalta.com/newsroom/news-releases/2010-04-29/transalta-declares-dividend

I am starting to think you didn't speak with the most knowledgeable tansfer agent.

The list on www.dripprimer.ca is the most up to date one that I know of, it is a great resource.


----------



## Toronto.gal

Cal said:


> I am starting to think you didn't speak with the most knowledgeable tansfer agent.
> 
> The list on www.dripprimer.ca is the most up to date one that I know of, it is a great resource.


It is entirely possible & I agree, that list is great, but I would think the most up to date information should come from the agents.

I first checked the issuer list CIBC Mellon has online, here is for TA:

http://www.cibcmellon.com/Contents/...Information/IssuerDetails/TransAlta_Corp.html

Then I called both transfer agents to ask if they had a list of companies that offered OCP discount and they said no, so I asked for confirmation for some companies and the answer was no to all of them.


----------



## Jungle

Does anyone know what day/quarter TA buys in the OCP plan? ALso do they just average out the price or something ?


----------



## Toronto.gal

Per this chart, it should be on April 1st.

http://www.transalta.com/investor-centre/shareholder-information/dividend-information

The transfer agent needs to *receive* your cheque 5 business days prior to the dividend payment date, that is, March 25th, so mail it earlier than this.  The price applied is a proration of the 5 business days. 

If you have this stock, then maybe you can confirm what I was told by CIBC Mellon, that there is no OCP discount for this company as mentioned above.


----------



## Xoron

*I DRIP everything*

I'm with CIBC IE, and they setup my account with a "synthetic" drip. So any eligible stock that I own, it'll be dripped back into more shares.

I think this is a service that CIBC offers, but you don't get the DRIP discount that some companies offer. I'm assuming CIBC gets to keep the spread


----------



## Toronto.gal

Xoron said:


> 1. I'm with CIBC IE, and they setup my account with a "synthetic" drip. So any eligible stock that I own, it'll be dripped back into more shares.
> 
> 2. I think this is a service that CIBC offers, but you don't get the DRIP discount that some companies offer. I'm assuming CIBC gets to keep the spread


Welcome to the forum!

1. Yes, but only if you have enough dividends to buy at least 1 full share [partial shares can only be purchased through transfer agents]. 

2. Did CIBC tell you that? Because I just spoke to them a couple of weeks ago and they confirmed that they do pass on the discount offered by some companies. See my edited Jan.15th post.


----------



## Jungle

Toronto.gal said:


> Per this chart, it should be on April 1st.
> 
> http://www.transalta.com/investor-centre/shareholder-information/dividend-information
> 
> The transfer agent needs to *receive* your cheque 5 business days prior to the dividend payment date, that is, March 25th, so mail it earlier than this.  The price applied is a proration of the 5 business days.
> 
> If you have this stock, then maybe you can confirm what I was told by CIBC Mellon, that there is no OCP discount for this company as mentioned above.


I own it but through questrade. I was thinking of picking up a share and doing a drip through transfer agent, but it seems like a hassle now. The price is dropping and I want to add to my position.


----------



## Toronto.gal

The timing is an issue, but sure, if a stock drops significantly, you shouldn't have to wait until April to purchase it [though by then TA could be $15]. 

That is why I have synthetic and true drips for some of my holdings, that way I maximize all the advantages that each offers; the former gives real time advantage of buying whenever I want at the price I want, and the latter gives the ability to reinvest every dime + it allows you to exercise dollar cost averaging + no commission on the OCP option!


----------



## Cal

Enbridge boosts dividend 15%.

http://www.theglobeandmail.com/globe-investor/enbridge-boosts-payout-profit-rises/article1892717/


----------



## Cal

Enbridge to split????

http://www.marketwire.com/press-rel...mends-2-for-1-Stock-Split-TSX-ENB-1399457.htm


----------



## marina628

I bet the farm on Enbridge on Feb 3 when that announcement came out lol


----------



## Cal

CDN banks dividend payouts:

http://www.theglobeandmail.com/glob...-some-dividend-detective-work/article1939102/


----------



## Mandy101

Sorry this maybe a dumb question. I setup an account with Credential Financial and am new to investing. If I want to reinvest the dividends I earn on my shares in my TFSA - is there an added fee that I will be charged in order to do this?


----------



## Toronto.gal

According to this link, it's free Mandy. Look under 'Other Fees.'

http://www.credentialdirect.com/pdf/CD_FeesCommissions.pdf


----------



## Cal

Buffett investing rules:

http://seekingalpha.com/article/260616-buffett-s-top-5-dividend-stock-ideas

I posted here as most of his picks kinda fall under the investing for income category.


----------



## HaroldCrump

Cal said:


> Buffett investing rules:
> 
> http://seekingalpha.com/article/260616-buffett-s-top-5-dividend-stock-ideas
> 
> I posted here as most of his picks kinda fall under the investing for income category.


It's not a particularly high yield portfolio.
I'd say too conservative for most folks.

The other misleading part of this article is recommending what Buffet holds _today_ is of no use for ordinary investors, without reference to the prices he originally paid for those securities decades ago.
You can't buy KO today for what Buffet paid all those years ago.
Some folks have blindly immitated Buffet by buying some of the same stocks that he has in his portfolio but don't (& won't) get the same returns as Buffet.

Robert Hagstrom (author of three monumental books on Buffet) made the same mistake while managing his own mutual fund.
He bought the same stocks - Coca Cola, Am Ex, etc. decades after Buffet but obviously did not get the same returns.
Years later, when he went back to Legg Mason, he realized the true reasons for it and since then has done much, much better.


----------



## Cal

Telus hikes divi:

http://www.theglobeandmail.com/globe-investor/telus-hikes-dividend/article2010953/


----------



## Toronto.gal

In case it hasn't been posted, for those who were not aware, CM recently reduced the discount from 3% to 2%.

https://www.cibc.com/ca/pdf/investor/amendment-notice.pdf


----------



## Cal

Just an update that Ken updated his site. I am sure it took alot of work.

http://cdndrips.blogspot.com/

or you can use Jon202's site at www.dripprimer.ca


----------



## Cal

http://online.wsj.com/article/SB100...58993216520896.html?mod=personal_fin_newsreel

If it doesn't open, just google, WSJ - Dividends: Collect, Reinvest, Repeat—for Decades


----------



## balk

Does anyone know if Questrade passes the DRIP discount on to the investors?

Thanks,

Balk


----------



## Jungle

Nope. But they will do free synthetic drip, whole shares only. The remaining cash is left sitting in the account.


----------



## Cal

Balk, I deal w TD, they pass on the discounts, but as it is through the brokerage, they will only do a synthetic drip as well and drip whole shares only as well, the remaining $ is deposited in your brokerage account as cash.


----------



## Cal

http://www.myownadvisor.ca/2011/09/25/revisiting-why-i-drip/

Again, another great link from CC's great site!


----------



## Belguy

For those of you who are not familiar with it, I thought that this would be of interest to some:

http://www.dripinvesting.org/tools/tools.asp

Also, for your further interest:

http://seekingalpha.com/article/298...ed-dividends-for-25-years-or-more?source=feed

Any thoughts?


----------



## KaeJS

I like the first link. Thanks Belguy.

Checking out the site now...


----------



## gibor365

Belguy said:


> For those of you who are not familiar with it, I thought that this would be of interest to some:
> 
> http://www.dripinvesting.org/tools/tools.asp
> 
> Also, for your further interest:
> 
> http://seekingalpha.com/article/298...ed-dividends-for-25-years-or-more?source=feed
> 
> Any thoughts?


I like dripinvesting.org ... too bad there is no such website for Canadian stocks...

BTW, dripinvesting.org specifies about 100 dividend champions, and S&P - much smaller number of dividend aristocrats... I personally like more dripinvesting.org
the diference betwwen approaches here http://seekingalpha.com/article/190601-comparing-dividend-aristocrats-to-dividend-champions

imho the best dividend stocks are those that combine sustaintabilty , current yeild and dividend growth , from my fast review of those lists those are stocks like MO, MCD, LEG, T, CINF


----------



## Cal

I thought I would post this and give this thread a boost. One of the guys involved w www.dripinvesting.org is featured today in the G&M.

http://www.theglobeandmail.com/glob...yle-to-match-ones-personality/article2282656/


----------



## Cal

http://dripinvesting.org/Articles/CanadianDRiPper/2011/The-Upside-of-DRIPs.htm


----------



## londoncalling

Thanks for the links.

I am torn on the idea of DRIPs. I can see the advantages of using a DRIP to save on fees. I have only been DIYing for a short time so I have yet to see the costs of my fees. Now that I am near fully invested (less than 5% cash in my equity portfolio) I don't plan to do many trades a year (10 or less @ 4.95) so that is less than $50. 

The author mentions the advantage of buying dips with a DRIP. However, from what I know about DRIPs, the purchases are made at market price. I think it is more important to realize that many DRIPs are offered at a discount. The author also fails to mention that you also have to buy into rising prices as well. If I had chosen to DRIP my position of IPL I would have raised my ACB considerably overtime. I would much prefer to control my purchases as then I can choose to pick entry price or even if I want to add to my position. It looks as though a SPP provides this option. Instead I use my div's to rebalance sectors and diversify. Does anybody here DRIP and not rebalance? To me it would seem the costs saved by DRIPping accounts would be lost to rebalancing.

I have yet to find anything on share dilution effects on stocks through DRIPs. Is share dilution not a bad thing for a share holder as EPS decreases by the creation of more shares? I can see from a company perspective it can make sense to save capital in the short term by diluting the stock but what about the long term effects? I would think the effects of compounding would apply here as well. 

I have ordered several books from the library to either read or re read on DRIPs. I will see if this will finally convince me to DRIP some or all of my div payers.

Once again thanks for the links Cal


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## Cal

I have to go back and read the basics every once in awhile and refresh. Tom Connolly is a wealth of knowledge. For those in the GTA I know the North York Public Library gets his subscription.

http://www.dividendgrowth.ca/dividendgrowth/home


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## Cal

The reporter must be following this thread. Tom Connolly is the source for this article on dividend stocks in the G&M. Financials are flshing warning signs for him.

http://www.theglobeandmail.com/glob...blue-chip-yields-flashing-red/article4264857/


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## fatcat

connolly has an interesting site ..
he says "There aren't many more than two dozen good dividend growth stocks in Canada."
if that's true i wonder what the heck he is talking about in his newsletter ? ... 
he says you need to own a dozen out of the two dozen

i would love to see his list of the two dozen ...


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## Cal

I believe his list is as follows:

SLF, MFC, GWO, POW, PWF, TRI, LNF, L CM, RY, BMO, BNS, NA, TD, BCE, EMP.A, CNR, FTS, TRP, ENB, CU, ACO.X

I am sure most of us drippers or dividend watchers have most of these on our list due to their dividend history. The trick is buying in and the right price.


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## CanadianCapitalist

Cal said:


> The reporter must be following this thread. Tom Connolly is the source for this article on dividend stocks in the G&M. Financials are flshing warning signs for him.


I don't understand the logic about yields flashing red. It is common when markets are stressed for dividend yields to go up and bond yields to drop. That's exactly when flight to safety takes place and stocks go on sale. Dividend yields could go higher, then again they may not. Since when did Connolly become an expert market timer?


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## Cal

I am not sure when Jon updated this on his site, but for fellow drippers it is great that he took the time to set up a schedule/calendar for mailing in cheques.

http://www.dripprimer.ca/spp-calendar

Personally I have my own at home, a condensed version, but it this were available previously I would have simply printed it and highlighted my holdings.


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## praire_guy

CanadianCapitalist said:


> I don't understand the logic about yields flashing red. It is common when markets are stressed for dividend yields to go up and bond yields to drop. That's exactly when flight to safety takes place and stocks go on sale. Dividend yields could go higher, then again they may not. Since when did Connolly become an expert market timer?


He isn't market timing. The financial stocks are yielding much higher than the rest of the list. Why? Possibly Greece, etc. he just means his other stocks are a safer buy at this time. A higher yield than the rest of a group of companies can signal a warning, so the banks and life cos are yielding high in relation to the market. Could signal danger.


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## Cal

As a generalization, there seems to be less companies offering a discount on their DRIPs than in the semi recent past.


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