My Own Advisor

 

DRIPs or DRiPs (Dividend Reinvestment Plans) are one of my favourite ways to grow my investment portfolio. There are many upsides to DRIPping but before I get to that and the DRIPs the DRIPpers DRIP let’s rewind a bit. Let’s understand the essence of this powerful investment tool.

What is it? How does it work?

The essence of DRIPping is this:  you can reinvest your dividends so they automatically buy additional shares of a company.

There are different types of DRIPs. Discount and full-service brokers offer “synthetic” dividend reinvestment plans which are the easiest to set up and manage. All you need to do is simply call your discount broker and ask to have your security (or securities) enrolled in the DRIP plan. DRIPs can be for dividend stocks or Exchange Traded Funds (ETFs) or mutual funds (if you really own those). Regarding stocks, not all companies have a DRIP plan but your broker will tell you which ones do and don’t. For the most part, all major blue-chip Canadian and U.S. stocks offer “synthetic” DRIPs.

“Full” DRIPs are a little more cumbersome to set up for the purposes of this post, we’ll focus on stock DRIPs. First, you have to own at least one share of a company. Next, you need to contact the company’s transfer agent – the organization that keeps track of the shareholder records – and enroll your shares in the plan. Next, you need to complete and submit some paperwork, and wait a few weeks for all the transactions to occur. There are many steps involved in setting up a “full” stock DRIP so to help you I’ve posted for many months now, a series of posts on my site. The hassles of setting up a traditional or “full” DRIP annoy some investors. Devout DRIP enthusiasts will tell you there’s no better way to invest. This is because “full” DRIPs allow you to purchase fractional stock shares with the transfer agents, so all of your dividends including the partial shares are recycled into more stock of the company. As well, “full” DRIPs allow you to purchase stock shares commission-free. Instead of buying the stock through your discount broker, you can simply send a cheque (remember those?) to the transfer agent and they will do all the work for you. Some companies are so excited to have you in their DRIP plan, they will offer you a discount on shares purchased – honest. “Full” DRIPs can be pretty amazing.

Benefits of DRIPs

Now you know the premise of DRIPping, and some the efforts required to get it set up, you can enjoy the many pleasures of being a DRIPper:

• DRIPs can provide dollar-cost averaging.
• Most full and synthetic DRIPs have no commission fees.
• Full and synthetic DRIPs are always working so you don’t have to someday, taking advantage of compounding your money.
• You can “turn off” your DRIPs whenever you want the income instead.
• DRIPs can help take the emotion out of investing.

Not everything comes up roses with DRIPs. With DRIPs you cannot control the price or timing of the dividend reinvestment purchase, you might be buying more shares when the stock price is high. With a synthetic DRIP, you need enough dividend income to buy one full share otherwise the cash will be paid out to you. Some full DRIPs have minimum purchase requirements. However, the upsides are pretty darn good and tend to trump the downsides which is why when you look at the DRIPs the DRIPpers DRIP, you’ll notice some familiar companies that offer full dividend reinvestment plans and why so many investors want to take advantage of them – as often as they can.

Here are the top companies the DRIPpers DRIP for 2012, courtesy of The DRIP Investing Resource Centre:

Bank of Nova Scotia (BNS) – paid dividends every year since 1832.

Bank of Montreal (BMO) – paid dividends every year since 1829.

Enbridge (ENB) – paid dividends for almost 60 years.

TransCanada Corporation (TRP) – paid dividends since at least 2000.

Johnson & Johnson (JNJ:US) – paid increasing dividends for 50 consecutive years.

Fortis (FTS) – paid dividends for over 30 years.

RioCan Real Estate Investment Trust (REI.UN) – paid steady distributions for almost 20 years.

Bell Canada Enterprises (BCE) – paid dividends since 1983.

PepsiCo – paid dividends since 1952.

TransAlta (TA) – has not missed a quarterly dividend payment since 1956.

For more reading:

DRIPs the DRIPpers DRIP – 2011 Edition

What do you make of this list?

Thanks for reading and sharing this article.

 

A few months ago, I wrote a comprehensive series about do-it-yourself (DIY) stock investing using full Dividend Reinvestment Plans (DRIPs) that include Share Purchase Plans (SPPs).  I wanted to share my DRIPping experiences with readers because I think this process is an excellent way for small-time investors (like me) to accumulate shares in established companies that pay dividends over time. 

Depending on the company and what it offers investors via their DRIP plan, you can start owning shares in many great Canadian companies with just $25 or $50 cheques – and the cost of a stamp.

You send your small cheques to the company transfer agents and they do all the work; they buy all the shares and they reinvest your fractional shares – accelerating your stock ownership.  I know this is true because I’ve been there and done it.  Once you’ve gone through the process to setup your full DRIPs and SPPs with company transfer agents, everything becomes routine.  You just need to let the magic of compounding do its thing.

At some point, after a few years have passed maybe, you might be in the fortunate position to own enough shares to start a synthetic DRIP with your discount broker.  That is, you now own enough shares so when dividends are paid dividends buy at least one whole stock share.   This is a great position to be in because you don’t need to rely on the transfer agents or your cheques to buy shares….your dividends do it for you.  Money that makes money, makes more money.

For me, when this happened (I owned enough shares to consider running a synthetic DRIP recently) it was the trigger for me to move my shares from the transfer agent to my brokerage account.  If you’re in this position or you’re getting close, this post is for you!

Here is the process I followed and some considerations to think about along the way.

Step 1 – Write a letter of direction

Basically, this letter spells out what you want the transfer agent to do.  I’ve used the following wording in my letters:

Hello,

This letter is to inform you I would like to withdraw and close all shares of <insert name of company> common stock from my Dividend Reinvestment Plan (DRIP).   At the time of this letter, I understand I own <insert #> whole shares.

Please send me a share certificate for all whole shares owned. 

At the time of this letter, I also understand I own about <insert #> fractional/partial shares. 

Please send me a cheque for any fractional/partial shares owned.

This request should completely close my DRIP with you.  I have attached a recent statement stub from my dividend reinvestment plan to verify my name, address and account information.

Thanks for your assistance.

<My name and contact information>

Step 2 – Complete DRIP statement stub

With every optional cash stock purchase or every time your fractional stock shares are reinvested, the transfer agent will send you a statement.  If you want to close your DRIP and SPP, you’ll need to detach a portion of this statement and complete it.

For Computershare, use Part B on the back of the statement, and select “Issue” - a share certificate for all whole shares and a cheque for any fractional shares.  Make sure you sign and date the statement stub.

For Canadian Stock Transfer Company, depending on the company statement, indicate termination from the plan and/or request a share certificate for all whole shares and a cheque for any fractional shares.  Make sure you sign and date the statement stub if indicated.

Step 3 – Take letter of direction + statement stub + stamp and mail away!

After your letter and statement go into the mailbox, wait about 3 weeks.  After that time period, you should receive your share certificate and a cheque.  Mostly likely, your certificate and cheque will arrive via regular postal mail.  Your certificate and cheque may not arrive at the same time, they could arrive a couple of days apart.  (This happened to me a couple of weeks ago.)   Once you get your share certificate, you’ve got some options.  You can visit the branch where your brokerage account is and fill in some paperwork with a banking representative to deposit the certificate into various accounts.  Some account options might be:

• Non-registered brokerage account,
• Brokerage TFSA, or
• Brokerage RRSP.

I suppose you could keep your share certificate around the house, but I wouldn’t advise that.  That piece of paper is probably worth quite a bit of money!

Regarding the cheque, you should probably cash it right away.  It really doesn’t matter what account, it’s your money.

Going-forward, be aware of some things: 

• It might take a week or more for any share certificate to settle in your account.
• Share certificate deposits into registered accounts such as your TFSA and RRSP will count towards your contribution room.
• Make sure you keep records for your adjusted cost base, even after your shares are deposited.  Why?  If you want to deposit your shares into your TFSA or RRSP, you may incur capital gains.  This deposit will be considered a “deemed disposition” meaning your shares are considered sold and re-purchased for your registered accounts.  If you have profits, be prepared to pay those capital gains come tax time. 
• If you transfer your shares at a loss, you cannot claim it as a capital loss.
• To reduce tax implications, your adjusted cost base should be close to the current stock trading price before moving shares into your brokerage TFSA or RRSP.  In this regard, time your deposit accordingly. 

I recently followed this process to max out my TFSA for 2012, with a dividend-paying stock.  That stock is now DRIPping synthetically, providing tax-free dividends for as long as I own the company and as long as the company pays me.  Given this company has been paying dividends for decades, I like my chances.

Thanks to dividend-paying stocks, stock transfer agents, my brokerage account and some patient investing – this was a great process to earn some tax-free income.   It took me a few years but all I needed was a plan.  :)

Are you a fan of DRIPs or DRIPping?   Have you followed this process above?   

Share your thoughts!

Thanks for reading and sharing this article.

 

DRIPping Canadian dividend-paying stocks can be fun but more importantly, it can be an excellent wealth-building strategy.

Imagine building some passive income from Canadian dividend-paying stocks over the next few years, commission free, buying these stocks whenever you want!   Does this sound too good to be true?  It might but this process does really exist and through my comprehensive series entitled Getting started with DRIPs and SPPs, Parts 1, 2 and 3 posted on my blog and on Dividend Ninja, hopefully I’ve spread the word about this great process.

To date, I’ve:

• Shared what full DRIPs with SPPs are, as well as the disadvantages of advantages of these plans (Part 1),
• Shared some options how to get that first stock share, and where you can look to find companies that offer DRIPs with SPPs (Part 2), and
• Started to share the complete process I followed a few years ago to start DRIPping with company transfer agents.  This process included buying my first share via my discount brokerage account and ordering that stock in certificated form (Part 3).

Today’s post, Part 4 of Getting started with DRIPs and SPPs is the series finale.  It’s the big finish!   This post will share how to take the share you now own in certificated form and get it registered with the stock transfer agent to start DRIPping.  It will also include some more of my own experiences and perspectives with DRIPping, including what I’m doing next with the stocks I’ve DRIPped.

First, a quick recap about the DRIPping process I followed…

Step #1 – Research DRIP plans and determine the company you want

Step #2 – Open a Discount Brokerage Account and put money in it

Step #3 – Buy the stock through your Discount Brokerage Account

Step #4 – Order the stock you purchased in “Certificated Form”

 

Let’s move on…

Step #5 – Start company transfer agent paperwork to enroll the stock in DRIP with SPP

So you’ve made the buy, the transaction has settled and you’ve asked for your share in “certificated form” from your discount broker.   Or, maybe you got your share from a Share Exchange Board.  Good work so far!

Let’s start some paperwork for submission to the stock transfer agent.  You can visit the transfer agent’s website and download required forms to initiate your full DRIP and SPP.  What type of paperwork?   Well, the DRIP Circular or the Plan Brochure will tell you so you should have already read that, but if you’re not sure you can call the transfer agent to talk it over.   The transfer agent will confirm what forms you should be completing to enroll in the DRIP and SPP.

Usually you need to complete a few forms:

• One associated with the dividend reinvestment plan; to state you want all fractional dividends reinvested,
• One associated with the share purchase plan; to state you want to submit cheques to buy more stock, and 
• One confirming this DRIP enrolment is not associated with any money laundering activities. 

Beyond these forms, as a suggestion, I think a “letter of direction” is helpful.  This way you can spell out in a personal letter to Computershare or Canadian Stock Transfer Company your intentions to start the full DRIP and SPP with them, just in case some of the forms completed have some minor errors on them.  It’s not a big deal, errors on the forms but if there are major mistakes the transfer agent won’t process your request.  When in doubt about how to complete any fields on the transfer agent forms, don’t hesitate to call them.  They are there to help you.  I’m guessing there isn’t a question they cannot answer when it comes to DRIPs and SPPs.  I know I’ve asked them a bunch of questions over the years and I always got an answer.

Step #6 – Mail your transfer agent forms and letter of direction

Once you have your share certificate in your hot little hands, remember two things: 

1. Complete the transfer agent forms with the share certificate number identified on your certificate.  If you’re not sure what that number is, call the transfer agent.
2. Keep that share certificate in a safe place!  Don’t send your share certificate to the transfer agent!  This is a real share, in a real company, and you want to hold onto it!

Mail your forms and letter direction to the address specified on the forms.  It will take a few more weeks to get your share enrolled in the DRIP and SPP.  Be patient and follow-up in 2 or 3 weeks with a phone call to the transfer agent to ensure everything got processed the way you thought it would. 

Step #7 – Send a cheque as part of your share purchase plan (optional cash purchase), and enjoy!

Once your share has been registered with the transfer agent, you should get some paperwork from them in return including a form called an optional cash purchase form.  Every month or quarter based on what the DRIP Circular or Plan Brochure will allow, you can write a cheque, complete this optional cash purchase form and mail the form with your cheque to get your stock purchases commission free.  Yup, your money for something and your stocks for free!  There is no requirement to send in a payment every month or quarter.  Depending on the company DRIP however, you must be mindful of the minimum purchase amounts required.  Some stocks have no minimum (Bank of Montreal for example), others have minimums of $100 (like CIBC, Bank of Nova Scotia for examples) and some companies are even higher.  Remember, one of the cardinal rules of investing, understand what you’re investing in.  DRIPping stocks is no different.  That means if you decided to DRIP a company that had a $100 minimum purchase the cheque you must send to the transfer agent must be at least $100.  

After dividends are reinvested and/or everytime your cheques are cashed, you will receive a statement from the transfer agent with transaction details.  You will continue to receive regular statements detailing your holdings for each company you own as long as your stocks stay in the DRIP with SPP.  Keep all statements/records for tax purposes.  Don’t lose them!   You’ll need this information to calculate your adjusted cost base for the stocks you’ll accumulate over the years.  Don’t know how to calculate your adjusted cost base?  Don’t worry there are lots of references online including some templates and instructions to follow on Jon’s site.  Thanks again Jon!

And there you have it!   You’re done!

Welcome to the world of DRIPping!

 

Now, for the big disclaimer…

 

Going forward, all these details written within in comprehensive series Getting started with DRIPs and SPPs I’ve recently STOPPED my DRIPs with SPPs with company transfer agents. 

I’m kidding right?

Why on earth would I do that?

How on earth could I do that after extolling the benefits of this fine process to you in this monster blog series?

Well, I stopped my full DRIPs with SPPs recently not because I don’t believe in this great process but because of this amazing process.  My strategy has been, and still is, once I have enough shares built up with company transfer agents to start synthetically DRIPping this stock back with my discount broker, I revert to that.

Over the last couple of weeks, I’ve been fortunate to achieve this status with Fortis and Bank of Nova Scotia.  I’m currently in the process of transferring my shares from the transfer agent back to me then to my discount broker.  This way, I’ll soon be running synthetic DRIPs for these two great companies; getting whole shares purchased using reinvested dividends (commission free of course) quarter after quarter after quarter.  The money left over from dividends paid and not reinvested will be used to buy new stocks or start another DRIP!   Over the next couple of weeks, there are some things I need to do with my discount broker to get my synthetic DRIPs going, but that’s another post for another day.

The thing is folks, I would never be in this position, this fast, to synthetically DRIP many of the companies I do today without the power of full DRIPs and SPPs; sending cheques to transfer agents when I could, on my time, paying no commissions, getting fractional shares reinvested to accelerate my ownership in great Canadian companies.  I own a world of thanks to full DRIPs with SPPs.   I guess that’s the reason why I felt compelled to write these posts.  I want to pay it forward, help others understand what I did and share what I know.

DRIPping doesn’t appeal to everyone.  That’s OK.  As you have read it takes work.  Even then, people don’t follow this approach.  As investors, we all have different investing goals, objectives and strategies to execute.  Indexing and DRIPping dividend-paying stocks happen to be mine, a two-pronged approach.  You need to determine what your goals are.

For those that were curious about DRIPs with SPPs, I hope I’ve satisfied a bit of that curiosity in my series Getting started with DRIPs and SPPs.  I’ve enjoyed writing it and I hope you’ve enjoyed reading it!

My Thank You List…

A BIG thanks to Dividend Ninja for allowing me to post some of my content on his outstanding blog.   He has been a great supporter of my blog and my investing journey from day one.

Along with the Ninja, I also have the following key folks to thank, some who helped me learn the DRIPping ropes, others who I continue to bounce silly questions off of, and still others for their support of my dividend-investing journey and this blog:

• Derek Foster, for The Lazy Investor and conversations in Ottawa.  Thanks Derek!
• Jon, for running Canadian DRIP Primer, one of the best DRIPping sites in Canada.  Thanks again Jon!
• George Smyth who runs The DRIP Investing Resource Center and all the great moderators like OperaBob, Wayneman, dfish, drppingsoprano and others who manage the message boards.  These folks are invaluable resources for all would-be and current DRIPpers!  Thanks guys!
• The Wealthy Canadian, for his support and mentorship.  Thanks!
• The Passive Income Earner, for his knowledge about DRIPping and dividend investing. 
• Last but not least, former blogger ThinkDividends, for his insight into the world of dividend-paying stocks and common sense approach to investing.

Your turn….

What are your thoughts about DRIPs and SPPs?

Did you enjoy this series?

Thanks for reading and sharing this article.

There’s do-it-yourself investing and then there’s really do-it-yourself investing. I’d definitely put full dividend reinvestment plans (DRIPs) that include share purchase plans (SPPs) in the latter category.

I wrote this on Dividend Ninja’s site a couple of days ago, part 1 in a comprehensive series about Getting started with DRIPs and SPPs. 

Thanks to my friend Dividend Ninja for encouraging me to post this content, and for support of my dividend-investing journey in general, Getting started with DRIPs and SPPs is going to be a four-part series on his site and mine.  In this series, I’ll provide you with a comprehensive look at full DRIPs with SPPs as they apply to Canadian dividend-paying stocks.

Part 1 is already posted on Dividend Ninja. 

Part 2 is here on my blog today.

Part 3 will be back on Ninja’s site and in the cleanup position, Part 4 will be on my blog.

 

Let’s pick up where we left off, shall we?

Question to My Own Advisor:
How can I get started with full DRIPs?

Answer:
The first thing you need to know is not all companies offer full dividend reinvestment plans (DRIPs) that include share purchase plans (SPPs), but the ones that do, pay dividends and are arguably some of best companies to own in Canada.  Most big Canadian banks (like Bank on Montreal for example) offer a full DRIP with SPP and many of those banks have been paying dividends for over 150 years!  Enbridge offers a full DRIP and they’ve got a tremendous history of paying and increasing dividends.  Fortis, Emera and BCE offer full DRIPs with SPPs and most of these companies are part of our pension plans as well as core holdings in many Canadian equity mutual funds.  Even Tim Hortons now offers a DRIP!   Who doesn’t love Tims?  I’ll provide you with some resources later on, so you know what companies offer full DRIPs with SPPs.

To get started in direct stock ownership with company transfer agents, you have a few options…  

Option 1 – Know somebody or find somebody.

One way to get your first share is to ask someone you know who has a full DRIP with SPP on the go, with the company you want, and request them to transfer a company share to you.  This can be done at no charge to the current shareholder but you’ll need to pay that investor for your share.  Usually a small gratuity or courtesy fee (about $10 or so) also goes on top of the stock value for their efforts in helping you out.

If you don’t know anyone, then you can try something called a Share Exchange Board.  There are folks who are shareholders with full DRIPs and SPPs running, who are often willing to sell one of their shares.  The same gratuity (usually $10 or so) will apply if these investors are willing to transfer a company share to you. 

Here are a few popular Share Exchange Boards:

The DRIP Investing Resource Center (and getting that first share).  This Board is excellent. 

DirectInvesting.com, associated with Moneypaper, but really geared for U.S. stocks.

Alternatively, and one of the best solutions, is to find a DRIP Club in your area.  Don’t know where to find them?  Well, instead of “Googling it” Jon who runs an outstanding site dedicated to DRIPping called Canadian DRIP Primer has already done some work for you. Actually, lots of work for you.  Thanks Jon!   

When you find your DRIP club, you can ask someone in the Club if they would be willing to transfer one of their company shares to you.  You would need to pay them the share value and small gratuity for the effort (again, about $10 or so).   It’s probably best to execute this option in person, since some minor paperwork is required for you to complete, to take ownership of the share.  Don’t worry, it’s not like completing your taxes!  The paperwork is quite painless and the seller of the share will know what to do, they’ll bring you your share and something called a Securities Transfer Form.

Any of these tactics above are an option, and they are an excellent way for someone who doesn’t have an online discount brokerage account, to get started with full DRIPs and SPPs.  Why?  Your discount broker will likely charge you fees if you don’t have enough assets in this account.     

Option 2 – Pooled purchase/group buy.

Another way to get your first share is to be part of a pooled purchase or group buy.  This is where one individual (who is usually an existing shareholder) buys a block of shares in a full DRIP eligible company and then has the transfer agent distribute shares into new accounts for everyone else in the group.   I’ve heard of small groups of people doing this, groups of 10 or so in Ottawa where I live but I’ve heard of larger groups doing this.  

 Option 3 – Do-it-yourself via initial stock purchase in your own discount brokerage account.

I’m not against option 1 or 2 above but I started my own foray into DRIPping a few years ago with this option, using my own discount brokerage account.   I felt it was safer (rightly or wrongly) because I was in control of all the transactions but more importantly I already had a discount brokerage account I could use.

 

Step 1 – Research DRIP plans and determine the company you want

Like I mentioned above, not all companies offer full DRIPs with SPPs.  Luckily for us, there are some great companies that do.  Instead of checking multiple company websites to find if your favourite company offers a full DRIP with SPP some very fine folks (and DRIPpers) like Jon (the first link below) and Ken (the second link below) run awesome websites to help you and I out.  Check out their sites for listings of eligible DRIP companies.

Canadian DRIP Primer

Canadian Dividend Reinvestment Plans (DRIPs) Blogspot

When you visit both of their sites, amongst the other great material, focus on companies that have “Y” (meaning “Yes”) in both columns for DRIP and SPP when you look at their respective lists of companies that offer DRIPs.  Why?  Remember the biggest power of full DRIPs comes with companies that offer share purchase plans, so you can invest small amounts over time, at your own pace, with those fractional shares reinvested.  If you enrol for a DRIP plan, but the company doesn’t offer a SPP, then you won’t be able to buy additional shares at will.   

Your research shouldn’t stop there.  Just because a company offers a full DRIP with SPP doesn’t mean you should automatically invest in it.  Direct stock ownership always comes with risks.  You need to understand what company you are buying and why you are buying it; understand what you’re investing in at all times.   Would you buy a new car without a test drive?  Would you buy a new TV without looking at the picture?  Would you purchase a plane ticket without knowing what you’ll do when you get there?  If you answered “yes” to any of these questions, then dividend investing and DRIPping isn’t really for you.  Taking risks with your investments is not really aligned with the DRIP and SPP investor, who often has a very a long-term view.  You need to be in for the long-haul with DRIPs, years not months, otherwise, why start all this work in the first place?

At minimum, dividend-investors should be looking at… 

• dividend history
• dividend frequency
• dividend growth
• dividend yield
• dividend payout ratio
• company cash flow
• company profits

 …and more.

You can find out what these metrics mean by starting with some archives from Dividend Ninja’s site, here and here.

Beyond research in the company you’d like to own, you should read the company DRIP Circular or Plan Brochure which is usually available online from the company’s website or from their transfer agent like Computershare or Canadian Stock Transfer Company. 

If you want to know what I mean and what you should be reading as part of your homework, check out this one from Bank on Montreal from the Computershare site.

These Brochures tend to be rather lengthy but readable

In my next post, Part 3 of Getting started with DRIPs and SPPs on the Ninja’s site, I’m going to continue sharing the process I followed to start DRIPping, which included buying my first share via my discount brokerage account, ordering that stock in certificated form and getting the transfer agent paperwork started to enrol the stock in the full DRIP with SPP.  I look forward to sharing those details with you!

So readers, I’d like to know…

Have you heard of dividend reinvestment plans (DRIPs)?

What are your thoughts about reinvesting dividends?  Have you done it?  Are you DRIPping stocks now with company transfer agents?

Are you enjoying these posts?

Want to continue following this series, click here to read Part 3 of Getting started with DRIPs and SPPs on Dividend Ninja.

Thanks for reading and sharing this article.

Running with the herd is fine, as long as you know what herd you’re running with.

In my opinion, following the top Dividend Reinvestment Plans (DRIPs) along with folks who love and use these plans (DRIPpers) is a good cohort.  In isolation, each dividend-paying company below has risks.  No doubt about that.  As a collection however, a host of established companies that pay dividends or distributions can be an excellent component of your overall investment portfolio. 

Instead of fragile eggs in one hand basket, I like to think of my dividend-paying stocks like tennis balls in a Rubbermaid tote.  The tennis balls will bounce up and down off the floor with any moderate (market) force applied and are very resilient to breakage, even in isolation.  Put those tennis balls in a tote, and you’ve got extra protection; you can drop that tote from almost anywhere around the house, the garage and this tote let alone the tennis balls in it won’t break.  (Can you tell where I was working this weekend? )       

Some experts would argue that buy and hold investing is dead.  Decades ago, it was largely all the rage.  Who’s right?  Who’s wrong?  Have times changed that much?   

Personally the answer doesn’t matter to me since I don’t equate buy and hold to mean ignore when it comes to direct stock ownership.  Financial pro Jim Yih thinks the same.    

Owning any of these companies below is not a licence for you or me to set and forget our retirement plans, but at least you can set and revisit it instead of panicking about the daily financial news.  I’m learning this more and more.

With all of these companies below, you have a strong history and in some cases, incredibly LONG history of dividends or distributions.  What’s more important in my opinion, you have this payment track record in poor market conditions, when equity markets are tanking.  When the financial world is going south in the aforementioned hand basket, you’re still getting paid because you’re an owner in a quality business, a business that pays real money from its real earnings.  Dividends don’t lie and long-term, a company cannot continue to pay them if they cannot afford to – simple as that.

There are many excellent online resources for the dividend investor and one of my favourites is The DRIP Investing Resource Center.  If you don’t know about this site, you’re missing out.  This site has:

• Community boards to discuss all things related to DRIPs,
• Information for you, how to get your first share in a dividend-paying company,
• Great books and reads for the aspiring and seasoned dividend investor, and lastly,
• Choices, those DRIPs the DRIPpers DRIP.

Below I’ve listed the top-10 companies the DRIPpers DRIP based on a poll I participated in earlier this year.  As a resource, I hope it helps you begin your due diligence exercises in becoming a dividend investor.   Herd-mentality doesn’t have to be all bad.  You can use this mentality to your advantage to increase your body of knowledge, learn more about investing opportunities around you and then apply that learning to your own situation. 

In closing, I hope you consider this list another tool in your investing toolbox!

Bank of Nova Scotia (BNS)

• Paid dividends every year since 1832.
• Dividend = $0.52 per quarter.
• Yield about 4%. 

Enbridge (ENB)

• Paid dividends for more than 58 years.
• Dividend = $0.245 per quarter.
• Yield over 3%. 

Bank of Montreal (BMO)

• Paid dividends every year, uninterrupted, since 1829.
• Dividend = $0.70 per quarter.
• Yield about 4.5%. 

RioCan Real Estate Investment Trust (REI.UN)

• Paid steady distributions for almost 20 years.
• Distribution = $0.115 per month.
• Yield over 5%.

Fortis (FTS)

• Paid dividends since at least 1972.
• Dividend = $0.29 per quarter.
• Yield about 3.5%.

 TransCanada Corporation (TRP)

• Paid dividends since at least 2000.
• Dividend = $0.42.
• Yield about 4%.

Bell Canada Enterprises (BCE)

• Paid dividends since 1983.
• Dividend = $0.518 per quarter.
• Yield over 5%. 

Johnson & Johnson (JNJ:US)

• Has increased dividends for 49 consecutive years, including 2011. 
• Dividend = $0.57 per quarter in USD.
• Yield about 3.5%. 

Canadian Imperial Bank of Commerce (CM)

• Paid dividends, and has not missed a payment, since 1868.
• Dividend = $0.90 per quarter.
• Yield around 4.5%. 

TransAlta (TA)

• Has not missed a quarterly dividend payment since 1956.
• Dividend = $0.29 per quarter.
• Yield about 5%.

What do you think of this list?

Seasoned dividend investors: do you own any companies on this list?

New investors: any stocks on this list you are considering?

I look forward to your comments!

Thanks for reading and sharing this article.