Saturday, March 21, 2009
Canadian DRIP & SPP List updates
I have added the following new plan:
Equitable Group Inc. (TSX:ETC)
Equitable Group Inc. announces Dividend Reinvestment Plan
I have deleted the following two plans:
Advantage Energy Income Fund (TSX:AVN.UN)
Advantage Announces Intention to Convert to a Growth Oriented Corporation and a Strategic Asset Disposition Program to Increase Financial Flexibility
Boyd Group Income Fund (TSX:BYD.UN) - DRIP terminated
I have updated the following plan:
NAL Oil & Gas Trust (TSX:NAE.UN) – DRIP reinstated
NAL Oil & Gas Trust Announces March Distribution and Reinstatement of the DRIP
As always, if you see any discrepancies please post a comment.
Sunlife and Manulife offer DRIP and SPP programs. And if you buy the stock, and get the share certificate yourself, set up the DRIP and/or SPP you will pay a per unit price of $0.06 when you eventually sell plus a service charge, curnetly at $24. Obviously a buy and hold strategy, and over the long run your selling charge plus the $0.06 per unit fee, probably cancels out the Brokerage fee that you would have to pay over the years whenever you purchase more shares.
But if you simply purchase through the broker, can they not set up a DRIP for you too. Obviously you wouldn't be able to do the SPP, and would have to pay if you purchased more shares.
I just wanted to make sure that I understood this properly first?
And I was curious as to the opinions of your readers as to the Insurers own program vs simply using your local bank brokerage to invest in these shares. (and yes I am aware that this may be an ill timed inquiry about investing in some of these insurance co.'s, but I did want to understand how things worked first before making any decisions)
You are also right in that you can purchase shares in companies through a discount brokerage and have the proceeds automatically re-invested. This is known as a Synthetic Dividend Reinvestment Plan. The pros of this set up are that the dividends can be re-invested fee free. It also is beneficial where companies pay out dividends but they do not offer a DRIP.
However, this program will only buy whole shares. So, if you make $50 in dividends per quarter and the stock is trading at $40 then you will get one share and they will leave the remaining $10 in your account. Compare this to the company plan which will re-invest all dividends received so that partial shares can be garnered.
Finally, most corporate plans allow you to purchase shares through their SPPs whereas any purchases through a Synthetic DRIP will incur the normal brokerage fees.
If you want more information on this issue go to: http://www.dripinvesting.org/Default.htm. You can see articles written by Robert Gibb (there is one about Manulife) or you can read posts about the pros & cons about buying these two insurance companies on the Canadian DRiPs forum board.
In the meantime, you can find more information here: Fort Chicago announces monthly cash distribution for March 2009 and reinstatement of Distribution Reinvestment Plan
'Manulife Financial Corporation announces amendments to its dividend reinvestment and share purchase plans
No administration fees are charged to participants by the Company or the Plan Agent for their participation in the Plan. The Company will pay for any brokerage commissions on purchases of shares under the Plan.'
Do you know if this is effective immediately? (I assume it to be effective May 7, 2009)
And any rumors about Sunlife following suit?
I wanted to know about having DRIPs and SPP. So having ITRADE
(instead of BMO Investorline, since it requires $5,000 minimum),
account with stocks, I have added DRIPs and SPP and applied through to corporate, just as you told me in LAZY INVESTOR.
So I got dividends reinvestment and SPP without paying commission anytime to brokerage. (awesome move)
The question I have is, do Corporate know how many shares I have in ITRADE seperate account, even though I buy stocks (SPP) through corporate?
Does that means they know regardless how many brokerage discount I have ?
(or do they know, the minute I apply for money laundry)?
If no to all,
Then what about the one stock I have with ITRADE?
Do I get dividends? Or Do I have to let them know?
Because I want to make sure, that the Corporate knows how many exact stocks I have, just incase I have few in the brokerage account and few through Corporate by buying SPP… and making sure I get all the dividends.
If adding DRIPs pograms, do they multiply with SPP? If it's yes, can you give me example in math formula how ?
Because the only thing, I understand is, it adds faster by adding SPP and/or let dividends reinvest, But I don’t think it multiply.
Am I correct ?
I think you have me confused with Derek Foster. Please scroll down to see me post on March 11, 2009 which mentions my affiliation to him.
To answer the second part of your question, your DRIP holdings will definitely grow faster if you put money in through the SPP than if you were to say just buy 10 shares and let them grow for 20 years.
As for a formula, there are too many variables here to do such a thing. You would have to think about: how much will the dividend grow, will the dividend ever be cut, how much will I add, will the company introduce a discount on re-invested shares, etc.
Thanks for putting this together.
Also, Uranium Focused Energy (UF.UN) discontinued their dividend some time ago.
When it comes to tax time, the transfer agents (Computershare, CIBC Mellon, etc.) will send you a T5 that lists your dividend earnings for the year. You should receive one T-5 for every stock you own. You can then add these values to your income tax statement.
As for selling, I am not sure how to account for the capital gains with an income tax form as I have not sold yet. However, for my future sales I have been tracking my Actual Cost Base (ACB) on an Excel spreadsheet since the beginning. A similar spreadsheet to the one I use can be found here: http://www.dripinvesting.org/tools/tools.asp In fact, this site has all kinds of articles and information for the Canadian DRIPper. Check it out thoroughly. I am sure a more in-depth answer to your capital gains question can be found here.
Thanks for reading,
Also, Pengrowth stopped their SPP program quite a while ago. Infact, they did it two weeks after I bought my first stock with them.
Just a note - IS.UN does not exist anymore, and HNT.UN suspended distributions earlier this year.
Do you have any expectation this will change soon?
It appears very difficult to diversify properly with SPPs in Canada.
Yes - there is a dearth of DRIPs in Canada compared to the United States. Even though we have lost many DRIPs in the past few years due to the conversion of income trusts back to corporations, we have also gained a new number of DRIPs in the last few months. This influx of companies is one of the largest that I have seen in many years.
As for proper diversification, you will find many people expand into U.S. stocks to achieve diversification that you speak of.
Thanks for reading,
Toronto, August 6, 2009
Manulife Financial Corporation announces discount for common shares issued under its dividend reinvestment and share purchase plans is now 3 % but cut dividend in half.
There are no Canadian sites like the one you mention. To get a share you either have to purchase it from a broker or from another DRIPper.
Please check out the following site for more info on acquiring your first share: http://www.dripinvesting.org
While you are there check out the message boards and specifically the Share Exchange forum. This is where DRIPpers exchange their shares. Also, be sure to read the series on Canadian DRIPs by Robert Gibb in the Articles section.
Best of luck!!
Thanks for your patience and understanding!!
Can I buy stocks through an online brokerage and then independently register for their DRIPs directly with the company I purchased the stock with or am forced to use a synthetic DRIP?
Cos.un has suspended their DRIP/SPP effective July 29, 2009.
Also, what is the process for enrolling in an American Drip, I am interested in Johnson & Johnson and Wal-mart.
Sorry for the late reply.
Yes - you can buy stocks through a broker and register. It is a little more convuluted to do it this way. Check this article by Robert Gibb on alternate ways of acquiring your first shares: http://www.dripinvesting.org/Articles/CanadianDRiPper/2003/07.htm
By far the most cost-effective way is highlighted under the heading Share Exchange Boards.
Thanks for writing,
Sorry for the late reply.
Thanks for the suggested update about COS.UN.
As for DRIPping in the US. I suggest you read this article by Robert Gibb: http://www.dripinvesting.org/Articles/CanadianDRiPper/2002/04.htm
It is a little dated but all the pertinent info is there. Also, if you have more questions then I suggest you search through the previous posts on the Canadian DRiPs board at the following address - http://www.dripinvesting.org/Boards/Boards.asp You will find that someone has already asked similar questions.
Thanks for writing,