Over 1,200 companies have dividend reinvestment plans for their shareholders. Companies like DRIPs for several reasons. Individuals, particularly those who are dollar cost averaging into their DRIPs, may see the drop in a stock's share price as a buying opportunity, as opposed to institutions and traders who move in and out of stocks with short-term goals in mind. This base of individual shareholders can help stabilize a company's share price. DRIPs keep capital inside the company, by not paying cash dividends outright and having those dividends reinvested in additional share purchases.
DRIPs can also help companies to raise additional capital without making a public offering.
The company purchases the shares and issues statements that detail the shareholder's account. This guide will tell where to start . . . By using this site, you agree to our Terms of Service . Your privacy is important to us. For information, please read our Privacy Policy .