#HYHRD Three Flavors of #DRIP

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.

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.

Monthly #DRIP record (beginning in May, 2018 and updated monthly) https://1drv.ms/x/s!AvfmFn4IPbHCgYw1lk-HMTvx6_NHMQ

matrix

 

Advertisements

Don't be shy! Leave a Reply...

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s