Canadian Dividend Reinvestment Plans (DRIPs)

Just to clarify for some of us who are a a little less experienced in this.

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 correct in the fees that you mention. However, be aware with these two programs also have a $15 charge for every Share Purchase Plan (SPP) payment that you make. So, you must make substantial purchases to offset these costs.

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.

Ken
 

I thought Fort Chicago had reinstated their DRIP?
 

You are right - Fort Chicago Energy Partners L.P. has reinstated their DRIP. I am just slow in updating my list of DRIPs.

In the meantime, you can find more information here: Fort Chicago announces monthly cash distribution for March 2009 and reinstatement of Distribution Reinvestment Plan
 

so now PSD has suspended their DRIP
 

First Capital Realty has suspended its DRIP as of August, 2008. (See http://www.firstcapitalrealty.ca/DividendsPlan.aspx)
 

Just when you clarify the MFC and SLF DRIP info....Manulife releases this.

'Manulife Financial Corporation announces amendments to its dividend reinvestment and share purchase plans

http://www.newswire.ca/en/releases/archive/May2009/07/c9309.html

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?
 

1)
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?

If Yes,
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.

-------------------------------

2)
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 ?
 

Elizxer,

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.

Ken
 

Just a heads up that Loblaws also announced a DRIP with a 3% discount on May 6, 2009.

Thanks for putting this together.
 

Do you know anything about Coventry offering an ETF that also has a DRIP plan? If so could you post a link to a website that can actively track it? Do you have any intentions of tracking any ETF's that may have DRIPs on your charting? (I know more work, haha)

Thanks
 

'Meltdown' presents a serious analysis of the boom-and-bust economic cycle and ties it with the actions of government and in particular the Federal Reserve. It is a great introductory to a different view than the mainstream thinking. It poses serious questions which I only hear from a few colleagues but not the mainstream media. It presents a framework for the ultimate cleaning up of the drowning economic mess.
 

I believe Natural OIL&Gas (NAE.UN) offers a 5% discount for their DRIP.

Also, Uranium Focused Energy (UF.UN) discontinued their dividend some time ago.
 

If this market driven interest rate is manipulated by increasing the money supply (money being used to measure wealth), investors and consumers are fooled into thinking that, a) Investors can make the investments and b) Consumers can keep on consuming. This creates a dislocation of consumption versus investment or savings, ending up in resources being gobbled up faster than if the investments were not made or the consumption delayed. This is the boom-bust cycle
 

Hi Ken I have really enjoyed your site. What can I expect when it comes to tax time? I know you pay taxes on dividends Evey year, how to do you report this? once it is time to sell your stocks you have to pay tax on your capital gain in seems really confusing on you calculate this, any advice?

Thanks
 

Thanks for the kind words about my site.

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,
Ken
 

Ken, I thought I should let you know SIF.UN is now JE.UN.
 

Love this site. I have pulled your data down and entered the tickers into Grism on Ubuntu so that it will give me up-to-date dividend info. Thanks for your hard work and for making my work easier.

Also, Pengrowth stopped their SPP program quite a while ago. Infact, they did it two weeks after I bought my first stock with them.
 

Nice list, very useful!

Just a note - IS.UN does not exist anymore, and HNT.UN suspended distributions earlier this year.
 

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

It appears Canada is far behind the U.S. in terms of SPP program availability (as a percentage of stocks in the respective markets).

Do you have any expectation this will change soon?

It appears very difficult to diversify properly with SPPs in Canada.
 

Sydney,

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,
Ken
 

FYI - update for your list
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.
 

Is there any sites like Directinvesting.com where you can purchase DRIPS for Canadian companies?
 

Apparently Emera (EMA) just announced a new 5% discount on div reinvestment as of October 2009. Nice!
 

Melanie,

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!!

Ken
 

CIBC added a 3% discount to its DRIP effective 7/28/09. Its not in the chart and didn't see it listed in the comments here, so I figured I would mention it.
 

Suggest that Telus Non Voting T.A-T be added to the list of DRIP/SPP's
 

Your last post was almost a year ago. Any worthy updates?
 

YES - there have been many updates. Unfortunately I have fallen behind in my updates due to a major illness in my family. I hope to update the list soon so that I can encompass all the changes.

Thanks for your patience and understanding!!

Ken
 

Exchange Income Fund now has a DRiP though CIBC Mellon:
http://www.cibcmellon.com/Contents/en_CA/English/InvestorCentre/Information/IssuerDetails/Exchange_Income.html
 

I'm a novice at investing and am really keen on starting off with DRIPs. I have opened an online brokerage account and am wondering:
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?
 

Ken,

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.

Thanks
 

Hey Topher,

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,
Ken
 

Hi Retired Man,

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,
Ken
 

PMT.UN has a DRIP but no SPP. http://www.paramountenergy.com/