Maximizing Returns with Dividend Reinvestment Plans (DRIP)

Power of Dividend Reinvestment Plans

Dividend Reinvestment Plans (DRIPs) are one of the most powerful tools available to dividend investors. They allow you to automatically reinvest your dividends to purchase additional shares, often at a discount to market price.

Key Benefits of DRIPs

1. Compound Growth

   • Automatic reinvestment of dividends
   • Purchase fractional shares
   • Dollar-cost averaging benefits

2. Optional Share Purchase Plans

   • Buy additional shares directly
   • Often offered at a discount
   • Avoid brokerage fees

3. Long-term Wealth Building

   • Consistent investment approach
   • Reduced emotional decision-making
   • Portfolio growth acceleration

Popular Canadian DRIP-Eligible Stocks

Several quality Canadian companies offer attractive DRIP programs:

1. Banks

   • Toronto-Dominion Bank
   • Bank of Montreal
   • Royal Bank of Canada

2. Utilities

   • Fortis Inc
   • Emera Inc
   • Canadian Utilities

3. Telecommunications

   • BCE Inc
   • Telus Corporation
   • Rogers Communications

Implementation Strategy

Learn how to:

• Set up DRIPs with your broker
• Choose between synthetic and true DRIPs
• Optimize for tax efficiency
• Track your reinvested dividends

Explore our detailed DRIP setup guides in upcoming posts.