#HYHRD Three Flavors of #DRIP

M1 Finance

UPDATE: December 28, 2019 – More information about Discount Drip Plan(s) added (see below).

The DTC Discount Plan allows reinvestment at a potential discount price between 0-pandaright5%. Although the DTC Discount Plan offers the benefit of a possible discount, please note the following:

-DTC guidelines state that discounted reinvestment prices can take on average up to 15 business days to post. You will still receive the reinvestment, but it may not be posted to your account immediately.

-The issuer determines the DTC discount price. Your broker cannot provide any reinvestment information until the reinvestment appears in the account.

Additionally, because your broker does not determine the discount price, they cannot provide DTC calculations.

-The eligibility of a security may change after you enroll in dividend reinvestment.

A security may be DTC discount eligible when you enroll in the service, but it could change its status to DTC discount ineligible.

-If a position is sold while waiting for the DTC dividend reinvestment, your broker credits the account with cash, not stock.

DTC = Depository Trust Company.

I originally got the above information from Fidelity. From my interactions with the fine people who frequented Stocktwits, I now have additional information to add;

The *UPDATED LIST* of eligible symbols; AGD, ARCC, BGH, BST, BXMX, CEN, CLM, CPTA, CRF, CSQ, DIAX, DNP, ECC, EDF, EPD, ET, FFC, FLC, FTF, GOF, GUT, HTD, LDP, MAV, MHI, NEWT, NRO, NZF, OXLC, PCI, PCK, PCN, PCQ, PDI, PDT, PFD, PFN, PFO, PGP, PHK, PKO, PMF, PML, PMX, PTY, PZC, RFI, RNP, RQI, SAR, UTF, UTG

An associate received this in a blurb from etrade;

A list of the securities that are eligible (Subject to Change):
AGD, CLM, CRF, DNP, ECC, EPD, ET, GUT, PDI, PCI, PCK, PCN, PCQ, PFN, PGP, PHK, PKO, PTY, PZC, OXLC

Of course, in order to take advantage of this plan at etrade you do need to call them.

ask to speak to a back office “licensed agent” and ask them to get you set up. The first line folks are clueless and will usually give you incorrect information. I mean, that’s why they are the first line. That’s where they start ‘em out. Key word: LICENSED AGENT.” and “Secondly, IF a call is required to get things set up correctly, remember this: NEVER sell 100% of your shares unless you don’t plan on trading $OXLC in the future. Keep at least ONE share! That way you won’t have to call to reestablish the Oxford DRIP plan.”

I’ve taken this from the prospectus for AT

From the prospectus for AT;
5. What is the source and price of common units purchased under the Plan?
We have the sole discretion to determine whether common units purchased under the Plan will come from
our authorized but unissued common units or from common units purchased on the open market by the
Administrator. We currently intend to use our authorized but unissued common units for all common units to be
purchased under the Plan.
The price for authorized but unissued common units purchased with reinvested distributions will be the
volume-weighted average closing price of our common units on the New York Stock Exchange for the five
trading day period immediately preceding the investment date, less a discount ranging from 0% to 5%. The
discount is initially set at 0.0%; therefore, the initial purchase price for authorized but unissued common units
purchased with reinvested distributions will be 100% of such average closing price. (Note: If you participate in
the Plan through your broker, you should consult with your broker to determine if your broker will charge you a
service fee.)
The purchase price for common units purchased with reinvested distributions on the open market will be the
weighted average price of all common units purchased for the Plan for the respective investment date, less a
discount ranging from 0% to 5%. (Note: If you participate in the Plan through your broker, you should consult
with your broker to determine if your broker will charge you a service fee.)
We will provide notice to you of any changes in the discount rate at least 30 days prior to the following
record date.

Oddly enough, AT doesn’t yet have a place on this list. 😉

So, how do you get on the DISCOUNT DRIP PLAN?

First.. what brokerage house are you with? If Fidelity or TDAmeritrade, just find and check the ‘reinvest dividend’ box. Will happen automatically. Ally doesn’t allow for it, nor does RH..

Apparently, for etrade and schwab, you need to call them. When speaking with schwab, the key phrase that pays is “licensed agent”, and when speaking with etrade it’s “Corporate Actions Department”.

Remember, NEVER sell 100% of your shares unless you don’t plan on trading $OXLC in the future. Keep at least ONE share! That way you won’t have to call to reestablish the Oxford DRIP plan.”

I often posted this message on stocktwits;

Why you should #DRIP *and* why you should DRIP at a broker that participates in the #DTC discount plan; https://stocktwits.com/togo24help/message/169539954https://stocktwits.com/togo24help/message/169539954 and https://stocktwits.com/PennyWeasal/message/179433364 and https://stocktwits.com/PennyWeasal/message/182265285 and https://stocktwits.com/FundamentalValues/message/183077029 but Google won’t help you with that. Did you read those threads? Well, did you read that blurb on my spreadsheet (‘Div’ tab)? https://docs.google.com/spreadsheets/d/1LBorL9d7ks1q92tp_mKPkrmvLZb6B3r3U0P86KDgjtw/edit?usp=sharinghttps://docs.google.com/spreadsheets/d/1LBorL9d7ks1q92tp_mKPkrmvLZb6B3r3U0P86KDgjtw/edit?usp=sharing Also read this; https://hyhrd.com/dividends/hyhrd-three-flavors-of-drip/. Know this; The #DTC discount plan is a #SECRET! You *HAVE TO CALL*! The information is *NOT* available *anywhere on the internet* except those links I have already given to you. *I* and *others* have taken many hours to amass that info.

I hope this helps!

Below is ‘old news’…

UPDATE: August 12, 2019 – Spreadsheet updated to now show #DRIP status as well as Dividends Received on the same tab, named for the year that they are received. DTC comments have been eliminated as that status can be inferred from the other data presented and is not as important. The ‘Dividend Histories’ tab has been moved to the far right of the workbook.

The DTC Discount Plan allows reinvestment at a potential discount price between 0-5%. Although the DTC Discount Plan offers the benefit of a possible discount, please note the following:

-DTC guidelines state that discounted reinvestment prices can take on average up to 15 business days to post. You will still receive the reinvestment, but it may not be posted to your account immediately.

-The issuer determines the DTC discount price. Your broker cannot provide any reinvestment information until the reinvestment appears in the account.

Additionally, because your broker does not determine the discount price, they cannot provide DTC calculations.

-The eligibility of a security may change after you enroll in dividend reinvestment.

A security may be DTC discount eligible when you enroll in the service, but it could change its status to DTC discount ineligible.

-If a position is sold while waiting for the DTC dividend reinvestment, your broker credits the account with cash, not stock.

DTC = Depository Trust Company.

Below is old news…

I’ve made a matrix (i.e.; spreadsheet) to show the date the dividend was received, when it was reinvested and the number of days it took, and my comment on whether it was a market or discount or even a NAV reinvestment. I also mark the price of the re-investment.

UPDATE: June 28, 2019 – Spreadsheet updated with a little help from my StockTwits friend, “PennyWeasal” (Jim)

UPDATE: July 26, 2019 – Spreadsheet updated (again!) with a little *more* help from my StockTwits friend, “PennyWeasal” (Jim) – Another tab was added with more info from previous iteration(s) of the DRIP spreadsheet(s). It’s also on my Google sheets and is labeled ‘Corrected Copy of Dividend Histories’, on the far right. It should be noted that at some point in past history an attempt was made to determine the amount of some of the discounts, and those amounts show in the ‘Comment’ Field.

The NEW TAB Dividend Histories contains all the previous entries and will now contain all the future entries as of 6/28/2019. You can filter by; Symbol, Pay Date, DRIP Date, # of days, Comments, and Price.

Each tab of the spreadsheet used to represent one month and the entries on that page begin with the date the dividends are paid, followed by the date the dividends are re-invested and the re-investment price. So, even though some dividends are re-invested the month following payment they will still be entered on the page the dividends were initially paid. This wasn’t clearly defined previously and this new policy began with dividends paid and posted in October, 2018.

I’ve since moved the DRIP spreadsheet to my “holdings” spreadsheet (in a separate tab), and I asked my friend Jim to tell me if he could “filter” the columns like I can. Since *I* can edit, and supposedly everyone else cannot (right, Google?), this was a valid question. This is his emailed response;

Ok, I think what you’re asking is can I ‘filter’ your Google Doc spreadsheet “Dividend Histories” using the Filter 1 filter you created.  Since the spreadsheet is protected from change, No, it won’t give me the drop down option to filter on individual Tickers using Filter 1.  What I see is:
image1
However, if I select the Filter button drop-down, I can create a Temporary Filter which then provides me the ability to filter by individual Tickers..  Select All, Clear all, then select Tickers I want to see, etc.  Once I’m done doing what I’m doing, I just close the Google Sheet and the Temporary Filter(s) evaporate and are not saved.  So everybody can filter the data down to what they want via Add Temporary Filter, then close the file and nothing is saved.   Does that make sense and is that what you were looking for?  Let me know.  – Jim
image1
image2
image3
image4
So, there you have it. A quick and not-so-dirty tutorial on how to filter (on a *computer*) the *NEW* and *IMPROVED* DRIP spreadsheet; “Dividend Histories’, or DRIP spreadsheet 2.0, if you will.
Now, on with the rest of the explanations (#NAV isn’t tracked any longer because I no longer ‘invest’ in Cornerstone ‘Fnuds’ because, well, Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi might have something else to add here but I don’t).

The three different flavors I’ll lay out on this page are:

  • Market DRIP
  • Discount (or DTC discount-eligible) DRIP
  • DRIP @ NAV

Market DRIP

When your dividends reinvest at market, or current share price, you are simply buying more shares with your dividends at market prices. There usually isn’t a long wait between dividend payment and reinvestment. This is the least efficient method of dividend reinvestment.

Discount (or DTC discount-eligible) DRIP

When your dividends reinvest at a possible discount (or the holding is DTC discount-eligible), you are simply buying more shares with your dividends at a discount to market prices. The discount is usually determined by the paying company, and it usually takes a week or more for the reinvestment to take place. This is more efficient than ‘Market DRIP’, but less efficient than ‘DRIP @ NAV’.

DRIP @ NAV

When your dividends reinvest at NAV, or Net Asset Value, you are simply buying more shares with your dividends at NAV prices. Now, obviously this would only work in the shareholder’s favor if the issue is trading at a premium to NAV. This is also determined by the paying company. This is the most efficient method of dividend reinvestment.

If you click this link, it will take you to my holdings spreadsheet where you can find the “Dividend Histories” tab. It looks something like this;

drip

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