DRIPs are already known as low-cost investment vehicles: the best ones have no fees for optional stock purchases or reinvestment of dividends.  But what if you could get even more “bank” for your buck by focusing on the best of the best?

I’ve been a do-it-yourself DRIP investor for almost a decade.  I started as an undergrad and over the years have refined my DRIP investment systems and strategies.  If I were starting now, I would begin my research with the following ranking of Canadian DRIP programs.  For information on enrolling in a DRIP, see my step-by-step guide on commission-free investing.

I have given the most weight to discounts, followed by history of dividend growth, the size of the minimum amount optional cash purchase and finally yield.  Why these criteria?  First, getting a discount to purchase stock that already costs you nothing in commissions is just like getting free money, and since it’s reinvested, all the better.  Second, Since most DRIP’ers are long-term buy-and-hold investors, dividend growth is going to be one of the surest factors in the success of your investment.  Finally, yield is informative regarding today’s purchase of the stock, but is also the least reliable indicator since it is merely an effect of the stock’s current price and in itself may not signify anything long-term.

I have also specifically chosen to limit the list to DRIPs that have no, or very low, minimum amounts for optional stock purchases.  That means this list does not include any DRIPs that require $250 or more for a minimum stock purchase.  This is my own judgment call, since most regular DRIP investors have been known to invest smaller amounts more regularly through dollar-cost-averaging rather than large lump-sums.

Top 12 100% No Fee, No- (Or Low) Minimum OCP Canadian DRIPs

With Discounts

1. Bank of Montreal (TSX: BMO) – up to a 5% discount on reinvested dividends; excellent, regular dividend growth. No minimum amount for optional cash purchases.
2. Enbridge (TSX: ENB) – 2% discount on reinvested dividends, excellent dividend growth with yearly increases; NO MINIMUM.
3. TransCanada (TSX: TRP) – 3% discount; consistently and reliably raise their dividend yearly; $50 minimum.
4. CIBC (TSX: CM) – 3% discount; usually increases dividend twice a year, except throughout this last financial crisis; $100 minimum.
5. Bank of Nova Scotia (TSX: BNS) – 2% discount, excellent dividend growth, which has seen twice yearly increases for the last three years; $100 MIN.

No Discounts

1. TransAlta (TSX: TA) – TransAlta used to maintain the same dividend for years with no increase, but that appears to be changing, with an increase in 2008 and again in 2009, surprisingly, despite the credit crisis.  No minimum.
2. Emera (TSX: EMA) – This electricity generation company consistently raises its dividend and there are modest growth prospects for the company, as well. $25 minimum.
3. BCE (TSX: BCE) – These days analysts seem to buy BCE not for its growth prospects, but just for the yield. The stock shows some growth of dividends; these were not increased yearly between 2001-2006, but have been since then (save the period during which the Ontario Teacher’s Pension Plan was in the process of taking them over).  The dividend was last increased August, 2009. No minimum.
4. Telus (TSX: T) – Between 2002 and 2005, Telus did not increase its dividend, but since 2006 there has been yearly dividend growth. $100 MIN.
5. Suncor (TSX: SU) – Suncor is another top-notch Canadian company, but the stock has a low yield.  Because of its potentially greater growth prospects right now, I’d rank this one slightly above IMO, despite the higher minimum.  Dividends are increased somewhat regularly, with the most recent increase being September 2009. $100 minimum.
6. Imperial Oil (TSX: IMO) – Imperial Oil is an excellently run company with great assets, but like Suncor, has a low yield.  Dividends have been raised somewhat consistently over the years, with it looking a bit better in the last five or so. $50 minimum.
7. Bell Aliant (TSX: BA.UN) – Similar to BCE, little growth is expected in this stock itself, but investors like it for the distribution.  After 2011, it will convert back to a corporation and might see a small dividend cut.  There has been modest distribution growth, but no more is expected before 2011.  $25 MIN.

This list is by no means a complete list of all Canadian DRIPs, but these are undoubtedly some of both the biggest and most popular plans.  These stocks are frequently discussed in programs on BNN and also comprise some of Canada’s largest companies and employers.  You can invest in U.S. DRIPs, too, but the process is a bit more complicated and requires you to have an American bank account or a chequing account drawn on U.S. dollars in Canada.

If a company you like isn’t on the list, it is probably because it does not have a DRIP (in the full sense of both free direct purchase and dividend reinvestment), or, as with many of the income trusts, the minimum monthly or quarterly required amount for purchase is high, such as $500 or even $1000 in some cases.  I have tried to make the list as up to date as possible, but if you notice an error, please let me know.

Best DRIPs For Your Money

The best bets for DRIPs, assuming you like the companies as long-term investments, are the top 5 that also have discounts on the reinvestment of their dividends.  Why pass up “free money”?  That being said, companies change their discount offerings based on the market, so it is not uncommon to see reductions, increases, or even suspensions of the discount.

If you’re new to DRIPs, start your research with this list.  You might also want to check out the guide I wrote on how to get started in commission-free, fee-free investing for more specifics on how to enroll.

This article is a guest post from Clare, a self-taught DIY investor and founder of MoneyEnergy, a Canadian personal finance and investing blog.  Clare also writes for Personal Dividends.  You can subscribe to her RSS feed here and follow her on Twitter.

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Have you ever lost your wallet or purse? If not, have you ever imagined what you would do if you did?

So it’s Friday afternoon and I’m lined up (with my family) to get the H1N1 vaccine for the toddler. After the 5.5 hour wait (yes hours), I decided to drop my family off at home and run a few banking errands at the nearest BMO branch. After making the various bank transactions, I headed home to settle away for the night.

The next morning, I decide to do some online banking so I instinctively head to the counter top where I always leave my wallet upon entering the house. However this time, it’s no where to be seen.

“No worries, it’s around the house somewhere” I said to myself.

With that, I went to the possible wallet locations such as my jacket, office, laundry and even searched through the kids toys. Still no where to be found. As I knew that I used my wallet the evening before, there were very few options as to where it could be.

I’d like to say that I’m a positive person, but a feeling of panic started to well up in the pit of my stomach. I started to assume the worse. What did I have in the wallet? Who do I need to call to cancel all my credit and debit cards? Which bills use automatic payment via credit card? What about my prepaid mastercard? ID’s, MCP and cash!

While in the midst of my melt down, the phone rings and it’s the police! Luckily, an honest person found my wallet on the ground outside the BMO branch and brought it to the police station after they couldn’t get in touch with me via phone. When I went to pick it up, I was thankfully given the contact information of the samaritan which I used to offer a small reward as a token of my appreciation.

Although my missing wallet situation worked out, what if I wasn’t so lucky? Here are some ways you can mitigate the catastrophe in the case of losing your wallet/purse:

1. Keep non essential cards out of the wallet/purse – For example, if there are credit cards or bank cards that you don’t use often, or even store cards that are seldom used, keep them at home.  I am an air miles collector, but I keep my air miles number in my cell phone but the physical card at home.
2. Record all essential information – Credit/bank card numbers, expiry dates and customer support numbers. Keep it all recorded and in a safe place.
3. Use a Service – There are services out there that keep all your card numbers in once place and make the cancellation/renewal phone calls for you.  However, this service can be replaced by simply keeping track of all your information yourself.

Back to the original question, have you lost your wallet or purse before?

21 Comments

Book Winners

Seems that there was quite a bit of interest in the book “Super Trader” as there were numerous entries.  Out of all the entries, 3 were randomly chosen as winners of a free copy.  Here are the winners:

1. Linda
2. Jeff W.
3. Desmond C.

Top 5 Posts of October 2009

1. How Alternative Minimum Tax (AMT) Works - With the big hype about the tax efficiency of dividend income, the AMT makes sure that the government gets their share.
2. Prepaid Credit Card Comparison - After receiving a generous prepaid credit card as a gift, I wrote a review discussing the merits and pitfalls.
3. Tips for buying and selling on Kijiji - Staff writer Kathryn discusses some tips when doing business on Kijiji.
4. Why Don’t Financial Planners Plan Finances -  This article lists various reasons why financial planners don’t create basic financial plans for their clients.  What do you think?
5. Creating a Frugal Halloween – Even though Halloween has just passed, here are some great tips for Halloween in future years.

Top Referrers

1. Canadian Capitalist
2. Canadian Money Forum
3. The Globe and Mail
4. Four Pillars
5. Frugal Dad

Top Comment Contributors

• cannon_fodder
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