Canadian Stocks to DRIP

Canadian Stocks to DRIP

Recently, while discussing dividend investing with a friend, the topic of DRIP (dividend reinvestment plan), specifically synthetic-DRIPs, came up on Canadian companies. Both he and I invest in companies through a discount broker, which does not support full DRIP and the discussion revolved around total investment dollars needed to DRIP in each company. This gave me an idea to compile the Canadian Dividend All-Star list of companies to see how much one needs to invest to achieve synthetic DRIP.

Note that this exercise is merely meant to be a resource that I am sharing and a company at either end of the scale may or may not be the best investment. Investors are recommended to perform due diligence before investing in any of the companies.

Before I list the companies and present the data, an introduction to the terminology is in order

  • DRIP (Dividend Reinvestment Plan) – Usually the term applies when a company runs an plan directly where investors, instead of receiving cash payouts from the company, receive partial (or full) shares in the said company. DRIPs are favored by dividend investors as the investment compounds over time by getting those dividends reinvested regularly.
  • Full DRIP – A full DRIP refers to a program where partial shares are allowed to be held. For e.g., if an investor owns 100 shares of a company and the dividend amounts to 0.75 a share based on market value, after the transaction is completed, the investor will own 100.75 shares.
  • Synthetic DRIP – A synthetic DRIP is common amongst discount brokers. When dividend amounts from the holding exceed atleast 1 share price of a company, investors can participate in the DRIP program to reinvest. Any partial amounts are paid out in cash. For e.g., if an investor own 100 shares of a company, and the dividend amounts to a total of 1.25 shares, post transaction, the investor will own 101 shares + cash amount of 0.25 shares.

So, with that terminology out of the way, here are the details.

The following spreadsheet details the Canadian Dividend All-Stars sorted by the amount of investment needed to DRIP in increasing order.

Caveat: Due to the unique way, Google and Yahoo Finance works, there were some quirks with getting the annual dividend values live, and even when I do so, the data is unreliable. For that reason, I have decided to hardcode the annual dividend column instead. So, the dividend amount data (column E) is accurate at the time of publishing.

Some companies, even though Canadian and trading on Canadian exchanges, declare their financials and their dividends in US$. Those companies are highlighted in a different colored cell and have the dividend amount converted to CAD$ based on current exchange rate.

For a full window view of the spreadsheet, click here.

Save a Copy:

If you want to save a copy and/or change the view to sort differnt column, you can open the the spreadsheet here. Click on File > Make a copy. Note that you will need a Google account and this will save it to your Google Drive.

What are your thoughts on investing based on the ability to DRIP? I personally do not pay much attention to the DRIP amounts and am happy to collect the cash regularly. The cash collected, combined with new contributions get invested after reaching a certain threshold. Do you pay attention to the DRIP amounts? Share you thoughts below.

Full Disclosure: My full list of holdings is available here.

20 thoughts on “Canadian Stocks to DRIP

  1. Not so long ago, I considered subscribing to my first synthetic DRIP. I would get full shares only and the rest in cash. In the end, I decided not to do this. My reasons are
    1- freedom to invest where I want to keep the portfolio where I want it
    2- as a covered call seller, I need multiples of 100. Dripping kinda disturbs this.

    I guess we all have our reasons to DRIP or not

    • We all have different reasons, dont we? I never thought about the covered call sellers when it comes to DRIP investing, but it makes sense. If you are building your assets and supplementing your dividend income with option income, then you want a multiple of 100.

      Thanks for sharing your viewpoint, AT.
      R2R

  2. Roadmap,

    Cool post. I actually DRIP just to keep a consistency with investing if I’m busy with other things. There is no cost to my account for dripping and I can do partial shares as well, which is a huge plus. The combination of partial shares and no fees are the pros to me. But I understand collecting and piling cash to make an investment with dividends as always an option. One could even say – turn off DRIP during high P/E times and then turn it back on on low P/E times, eh?

    -Lanny

    • Thats one way to do it I suppose. Normally, I dont try and manage my DRIPs based on the earnings multiple. I’d rather just leave it on “cruise control”. But thats just me.

      Thats really cool that your broker allows you to hold partial shares. Unfortunately, our brokers here (Canada) are very incompetent. Hopefully we will come out of the dark ages as competition grows.

      R2R

  3. Thanks for the different perspective on DRIPs. I’ve thought about this before regarding some of the no-brainer companies but luckily most of the discount brokers here in the US allow reinvestment with fractional shares so it’s not much of an issue.

    Although my personal preference is to just collect dividends in cash and add with new savings/investment capital with the idea being I can select companies that offer a better value at the time as opposed to just automatically reinvesting. But since capital is non-existent for the time being I do have the DRIP on for about 5 of my holdings in order to build the positions up some.

    • I hear you, JC. Sometimes I just wish to collect the cash dividends as well as I can deploy the cash elsewhere. Its cool that your brokers allow fractional share holding. As I replied to Lanny’s comment, thats seldom the case here.
      Anything counts…keep building those positions up.

      Best
      R2R

  4. Sasha says:

    what about the tax situation and the ever changing ACB due to drips ?

    anyone had a holding for years and years that they have since sold and had to calculate CG on ?

    -Sasha

    • Hi Sasha,
      There are other resources available online to calculate the ACB and tax calculations. This sheet purely looks at the investing based on DRIP facet — as some investors might use tax-sheltered accounts and do not need to worry about such calculations.

      Best
      R2R

  5. Hello Road….

    I would want you thank for having the me to add has your list of blogroll

    I appreciate(estimate)

    And great beautiful list of RRD I look at it closely!!! It is going to simplify me the life because I wanted to make one ……

    I work has to make one list on quite the titles(securities) of the TSX which paid(poured) one dividend in 2016 I am returned has 900 companies and more, I wanted to learn it more!!!!! I even discovered titles(securities) which I have never waited to speak about them and which(who) are interesting be going to stay has to raise capital

    Just rest has to simplify the parameters of the speadsheets!!!

    Thank you …… and good day

  6. Very R2R, very interesting. At the moment we prefer to DRIP with our favourite share ideas (eg Challenger (ASX:CGF) but receive cash for the rest which bumps up the amount we can invest with our next purchase (but with the same brokerage fee). I get that if you DRIP with everything you don’t pay any brokerage but with some companies we aren’t AS excited about, we don’t want more of their shares.

    Tristan

    • I hear you. Companies which already have a full position may start skewing the diversification aspect if you let it drip. I am currently at a stage where I am able to drip 3 companies and they are working away at it.

      Thanks for stopping by and the comment
      R2R

  7. Thank you for Sharing!

    I actually just started to do Synthetic DRIP. I figure that would make much sense in my case when I have a small portfolio size. If I collect my dividend in cash and invest with my additional saving, it would take too long before I can re-invest again.

  8. My dividend portfolios are all with Sharebuilder (Cap One) and I reinvest all my dividends automatically and buy fractional shares with every distribution. It’s really much easier than having to enroll in company specific DRIPs that differ from company to company. The way I’m set up is all automated and I rarely pay attention to my DRIP amounts.

  9. 12mile says:

    Great list.

    As a retiree I keep an eye on the dividend all star lists but I start my due diligence on companies that offer DRIPs at a discount. For example, EMA.TO 5%, REF_UN.TO 4%, PLZ_UN.TO 3%, KEY.TO 3%, etc.

    I feel if the company is good enough to be in my portfolio and fits, why not get the DRIPs at a discount. Instant profit. It all adds up….

    • Good point, 12mile. The DRIP discounts are part of directly investing through their transfer agent – in which case, a full DRIP is offered. You dont have to worry about investing enough to synthetic DRIP. Companies giving you a discount is a great way to get an extra return on the investments.

      Best wishes
      R2R

Leave a Reply

Your email address will not be published. Required fields are marked *