Once you find out the firm offers a DRIP, the next step is to find out the specifics of the plan. Not all DRIPs are alike. Some firms permit the reinvestment of preferred dividends for common shares, while others may not. Some companies allow partial reinvestment of dividends, while others require that all dividends be reinvested. A number of firms permit optional cash payments only if the shareholder participates in the DRIP, although some firms allow shareholders to receive all dividend payments and still participate only in the optional payment feature of the plan.
Companies differ on the timing of stock purchases for shareholders.
The amount of optional cash payments that may be made into plans differs among DRIPs. Costs of the plans differ, especially fees shareholders pay to sell stocks from the plans. A host of other differences may arise between plans, such as the availability of safekeeping services for shareholders' certificates and the number of shares required to enroll in the plan. It pays to obtain a plan prospectus before investing. So you've picked out a stock you like, the company has a DRIP that meets your objectives, you've gone over the prospectus, and you're ready to take the plunge.