The previous post looked at Dividend Reinvestment Plans (DRIPs) and Share Purchase Plans (SPPs) as candidates for the cheapest way to invest. Let’s fill in a few more details.
To review: there are no management expense ratios (MERs), commissions on reinvesting dividends/rebalancing, or commissions to buy shares under the SPP. There could be a commission to buy the initial share position to become a registered shareholder, but it often can be avoided by trading with other DRIPers on dripinvesting.org. Besides, if commissions are paid on the initial share position, the discounts from market prices on subsequent purchases under the SPPs will offset the commissions.
Below is a list of TSX-listed companies with both DRIPS and SPPs, according to the July 24, 2009 issue of Investor’s Digest of Canada. Nearly all the companies offer discounts from 2% to 5% on shares acquired through their SPPs. Dividend yields are still reasonably attractive, averaging close to 4%. Other info:
• companies with asterisks have raised their dividends every year over the last five or more years, according to the Mergent’s Dividend Achievers list.
• the SPPs have ceilings on the amount of stock that can be acquired; they range from $20,000 to $250,000 according to the Canadian Dividend Reinvestment Plans (DRIPs) blog.
• Agnico-Eagle Mines Ltd. plans are in U.S. dollars
• dozens of income trusts also have DRIP/SPPs but are not included in the list below.
Aberdeen Asia Pacific
Canadian General Investment Ltd.
Agnico-Eagle Mines Ltd. (NYSE:AEM)
Read Part I: Economical Investing: ETFs, DRIPs and SPPs