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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 ?
Pollock was a great painter before he discovered the drip.
Simon Cowell is so enamoured with the drips he says he has a blend of vitamin B12, magnesium, vitamin C and "something for your liver" pumped into his body every week
As shown in Figure 1, chicken breast muscles with high drip loss showed lower levels of HSP90 compared to that of low and intermediate drip loss groups.
Together, Leadpages and Drip will provide businesses with a more dynamic digital marketing experience.
The market for drip irrigation systems in the Middle East and North Africa is fragmented in nature.
You've probably received drip campaigns from businesses that use services like Constant Contact, MailChimp or iContact.
The drip coffeemaker category is one currently struggling to grow bemuse of the single-serve category," said Michele Lupton, marketing communications director for Groupe SEB North America, parent of the Krups brand.
The Medicines and Healthcare products Regulatory Agency has now suspended the use of such drips because "their benefits no longer outweigh the risk".
DRIP participants generally cut out brokers' commissions, reducing their costs to acquire shares.
Unlike the traditional way of growing vegetables by directly planting the seeds in the soil, the micro drip system uses black UV-resistant polyethylene bags where the soil is mixed with compost and manure for substrate improvement.
The controversial treatment hit the headlines last month after Rihanna tweeted a snap of a drip going into her arm after a week of heavy partying and gigs.
According to Yildrin and Korukcu (2000) drip irrigation generally achieves better crop yield and balanced soil moisture in the active root zone with minimum water losses.