Dividend Reinvestment Plans (DRIPs) offer shareholders a way to buy stock directly from the company or through a transfer agent, usually through a monthly plan. They get their name from the fact that they also reinvest dividends paid, purchasing more stock. Investors in DRIPs have a long term investment horizon, and invest money regularly, most commonly on a monthly basis. This means that investments also benefit from dollar cost averaging.
DRIPs are a great way to begin investing, and then continue to do so on a regular basis. They avoid brokerage commissions, and take advantaage of dividend reinvestment. An investor has natural dollar cost averaging nd will be investing in companies that he does not foresee selling in the near future. We looked at the seven best stocks to DRIP: 1. General Electric Company (GE), 2. Wells Fargo & Company (WFC), 3. EI DuPont de Nemours (DD), 4. Travelers Companies (TRV), 5. Coca Cola Company (KO), 6. The Boeing Company (BA) and 7. Caterpillar (CAT)
Source: Seeking Alpha
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