Friday, July 21, 2017

Turning Off The Taps A Bit

Over the past couple of years I have had DRIPs turned on for a few positions. I haved DRIPped shares and units of Boston Pizza Royalties Income Fund (BPF.UN), Cominar REIT (CUF.UN), Dream Office REIT (D.UN), Killam Properties REIT (KMP.UN), Enbridge (ENB.TO) and Bank of Nova Scotia (BNS.TO). Some of these positions are through the brokerage while others are directly with the transfer agent. The latter is the basically the "old" way of buying stocks where you get actual stock certificate. The downside of the "old" way of purchase stocks is that you do not have control over the purchase price or sell price as you just send in a check and the shares or units are purchased on a certain date. Also the purchase prices could be averages of the last few days or some other criteria that would be often spelled out in the documentation.

Recently, I have had DRIPs turned on the Enerplus Corporation (ERF.TO), D.UN, CUF.UN, BNS.TO, and ENB.TO. The DRIPs for BNS.TO and ENB.TO are directly with the transfer agent and these positions are in the investment tab spreadsheet and have partial shares. Some brokerages off partial shares, but they are few and far between.

I have turned off my DRIPs for D.UN, CUF.UN, and ERF.TO. The dividend payout for ERF.TO is no where close to being able to purchase 1 whole. D.UN was dripped in both my TFSA and margin accounts. I have turned off the DRIPs due to my current financial situation. I would prefer to keep the DRIPs on for both D.UN and CUF.UN as these positions are trading above my average cost basis per share.

I am keeping the DRIPs on for ENB and BNS with the transfer agents. For disclosure, I also have positions in ENB in my TFSA and BNS in my margin account.

The benefits of DRIPs, is that it is a way to acquire more assets for doing basically nothing. Also, a lot of DRIPs have discounts on the shares purchased with re-invested dividends. Does this apply to DRIPs by brokerages? Some brokerages pass the discounts along while others do not. My brokerage, Questrade, does not pass the discount along.

There is also some posts on DRIPs in my DRIP tab above.

I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.


  1. I have always been intrigued by the idea of DRIPS, but never had enough to actually make a substantial difference.

    Thanks for the writing on this issues. I was certain Questrade would pass on the discounts to their customers.

    1. DRIPs are good for real small accounts. For example if you have a position of $300 paying a 3.5% yield, you would get $10.50 per year or $2.62 per quarter. Which is hardly nothing. If that was enrolled in full drip, you would used to buy more shares which leads do a higher dividend payment next quarter. That is benefit of a full drip. It will seem small at first and then after a few years you can start to notice it more and more.

      A synthetic drip (where you can only purchase whole shares) means you have to own a lot of shares.

      Google "Grace Groner" and something come up like this.. She bought 3 shares of Abbott Labatories in 1935. The dividends were reinvested 75 years later was over 7 million