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Dividend Reinvestment Plan

A practice or agreement in which dividends on a security are used to buy more of the same security rather than be disbursed to the investor in cash. A dividend reinvestment plan is relatively common in mutual funds; investors agree to use dividends and other capital gains to reinvest in more shares of the mutual fund. While this involves assuming more risk in the mutual fund, it carries the possibility of higher returns.


Dividend reinvestment plan (DRIP).

Many publicly held companies allow shareholders to reinvest dividends in company stock or buy additional shares through dividend reinvestment plans, or DRIPs.

Enrolling in a DRIP enables you to build your investment gradually, taking advantage of dollar cost averaging and usually paying only a minimal transaction fee for each purchase.

Many DRIPs will also buy back shares at any time you want to sell, in most cases for a minimal sales charge.

One potential drawback of purchasing through a DRIP is that you accumulate shares at different prices over time, making it more difficult to determine your cost basis -- especially if you want to sell some of but not all your holdings.

References in periodicals archive ?
0% of the MENA drip irrigation systems market was held by the agricultural segment in 2013.
The main factor that restricts extensive use of the drip irrigation system in Uzbekistan is the use of electrical power and high investments needed for its introduction.
The impact of these factors along with water through drip system could then be related to the yield and quality of mango and a final conclusion could be drawn.
The field research and computer simulation modeling demonstrated that subsurface drip irrigation of processing tomatoes is highly profitable compared to sprinkle or furrow irrigation under saline, shallow groundwa-ter conditions.
The decorative drip stand can then be moulded in various friendly designs that children will find attractive.
To buy enough fresh fruit and vegetables to give me the same amount of vitamin C as I get in a drip would be very costly.
Single-serve's growth has also spurred manufacturers of drip coffeemakers to raise the bar on innovation.
The latest drip irrigation tubing, which is about a half-inch in diameter, has in-line emitters that are, at first glance, invisible.
If the level is 71-80 mg/dL, decrease drip by 1 unit/hr.
My new drip irrigation system waters as often, as much and in the locations I desire.
Although you forego a broker's commission to enroll in a DRIP program, many companies with direct investment plans require minimum initial investments from $250 to $1,000 to join.
To reach every thirsty plant, water needs to flow through these hoses, called drip tape, at the correct pressure.