Comments on: Top Low-Cost Canadian DRIP Stocks Ranked by Yield, Dividend Growth and Discounts

By: Startupgirl

Startupgirl — Wed, 10 Feb 2010 05:38:53 +0000

I purchase some stocks through Questrade. I called Quest to get the stocks certificated and was told the cost is $300 to get this done. Judging from this price it will end up costing me more for the certificates ($3600 CND) which is just a little less than what I paid for the stocks. Is this price too expensive? And why does the stock need to be certificated and is certification needed for DRIPS. This is my first experience buying stocks on my own.

By: Ken

Ken — Wed, 03 Feb 2010 16:45:10 +0000

Check out http://cdndrips.blogspot.com/ for another list of Canadian DRIPs

By: cannon_fodder

cannon_fodder — Mon, 23 Nov 2009 14:28:54 +0000

This is a good article which has lead me to think of a few questions:

1. What happens if I own the same stock in multiple accounts? If I get a certificate does that allow me to DRIP only in the account from which that certificate orginated?
2. Is there a difference between stocks which issue dividends and those which issue distributions (e.g. Income trusts) in any significant way which would impact the DRIP process?
3. Has someone published a hypothetical analysis of the advantage of a “real” DRIP vs. a synthetic DRIP over a long period?
4. Once you possess the certificates, should they be placed in a safety deposit box, or is there a way to prove ownership and be made whole should they be destroyed in a house fire?

By: Paul

Paul — Sat, 21 Nov 2009 23:33:35 +0000

I can’t believe you didn’t mention Fortis, TSX: FTS. It has a 35 year record of increasing its dividend every year, the longest record for any company in Canadian history. Check out this chart http://www.fortis.ca/InvestorCentre/FortisStock/DividendHistory.aspx

I would pick Fortis over Emera any day!

By: Jon D.

Jon D. — Sat, 21 Nov 2009 14:52:53 +0000

Well, it’s definitely an interesting idea sorting or ranking Canadian DRIP&SPP Plans based on discount and OCP minimum, but honestly, considering there are only 16 corporations (plus 2 fringe corps EIF, OLY) it’s like trying to prioritize your children.

I think the focus should be if an investor chooses DRIPing, to ensure they are covering the major sectors for an attempt at diversification.

By: MoneyEnergy

MoneyEnergy — Sat, 21 Nov 2009 03:00:37 +0000

@rico,rph – Don’t buy your certificates through Questrade, it is ridiculously pricey. If you go through the Big 5 discount brokers, it’s only about $50-52 at each of them.

@Ray – I’m not positive about the RRSP question, since I haven’t tried putting them in my RRSP. As for TD honoring the discount, I believe they would on the reinvested portions (someone correct me if I’m wrong) – again, I’m not at the point yet where I’m pseudo-dripping certain stocks at the big brokers.

By: rico,rph

rico,rph — Wed, 18 Nov 2009 20:13:06 +0000

How do you guys feel about paying $300 to certificate with Questrade? I called them today and this is what they charge for each Canadian position. Seems pretty pricey. What do the other brokerages charge?

By: Ameila

Ameila — Mon, 16 Nov 2009 15:28:45 +0000

There is a high yield DRIP option that is free. My Tax Free Savings Account is in FIE from Claymore an ETF that is made up of Canadian Financials. The yield when I bought it is 9% (currently 7.1%) and I have it set up so each month it buys more shares and fractionally at that for no cost. The compounding effect is tremendous and it has returned over 20% this year. You can set up SIPs and DRIPS for all of Claymore’s ETFs now.

By: Zulli

Zulli — Mon, 16 Nov 2009 08:20:23 +0000

@ Steve, Yeah I agree. Very informative! and the visitors and the site’s owner share questions and answers which is good.

By: Mark in Nepean

Mark in Nepean — Sat, 14 Nov 2009 15:12:41 +0000

rajarajan:

Visit the following site, it will get you started (free site, seeking to help those who no longer want to pay commissions to buy stocks; like me)

http://cdndrips.googlepages.com/home

Happy reading and learning.

By: Steve Zussino

Steve Zussino — Sat, 14 Nov 2009 03:38:55 +0000

This was a great article. Very well laid out and good backup for my purchases of BMO!

By: Ray

Ray — Fri, 13 Nov 2009 19:15:10 +0000

Need clarification: for individual investors, you cannot participate in a “real DRIP” (i.e. obtaining the physical stock certificate) within a RRSP plan. Is that correct?

Also, before I call TDW, could anyone please comment on whether these disc. brokages would honour the DRIP discount (e.g. 3% for BMO) for each full share?

Thanks.

By: Ray

Ray — Fri, 13 Nov 2009 19:11:34 +0000

Need clarification: For individual investors, you cannot participate in a “real DRIP” (i.e. obtaining the physical stock certificate) within a RRSP plan. Is that correct?

Before I call TDW, could anyone please comment on whether discount brokages would honour the DRIP discount (e.g. 3% for BMO) for each full share?

Thanks.

By: MoneyEnergy

MoneyEnergy — Thu, 12 Nov 2009 23:19:33 +0000

@Sauce – yes, you pay tax on all dividends, reinvested or not. You’ll receive a form at the end of the year for it (unless you’re doing a synthetic DRIP in your brokerage account within an RRSP, of course).

By: Sauce

Sauce — Thu, 12 Nov 2009 20:30:23 +0000

Question on the dividend portion that is being reinvested – if it being automatically reinvested do you pay tax on the dividend itself?

By: BasicallyMoney.com

BasicallyMoney.com — Thu, 12 Nov 2009 16:02:27 +0000

@bob: Canadian ShareOwner Investments is a current member of the Canadian Investor Protection Fund. See http://www.cipf.ca/c_find_active.asp … as such, you ought to be protected in the case of dealer insolvency. Furthermore, I believe customer assets are held by a trustee, The Canada Trust Company.

By: bob

bob — Thu, 12 Nov 2009 15:31:43 +0000

Canadian shareowner ..how safe is it…i believe it depends on its founder..
what happens after the founder..would there be continuity..

By: BasicallyMoney.com

BasicallyMoney.com — Thu, 12 Nov 2009 03:32:19 +0000

I agree with @MoneyEnergy. I have one of my accounts with Canadian ShareOwner and like the service. It’s the easiest way to have DRIP-like investing without having to deal directly with individual issuers (which I used to do.)

By: MoneyEnergy

MoneyEnergy — Thu, 12 Nov 2009 03:14:18 +0000

@Dave – I think you mean a DRIP program with discounts which is composed of a high-yield ETF? Good question!

The traditional DRIP format I highlighted in the article wouldn’t apply to ETFs as such, by design. But you might still be able to put together your own “DIY DRIP” with an ETF.

One of the first options I found for cheap ETF investing is through Canadian ShareOwner. Unless you have more than 100k in investment assets (I don’t yet), ShareOwner will be one of the cheapest options. But also check out TradeFreedom and the other $9.99/trade brokers.

As a rule, I have not really seen many “high-yield” ETFs. Even when the underlying assets are high-yield, like REITs sometimes, I find the ETFs don’t really pass on the full yield.

But if you find one you like, you can just collect the dividends/distributions and reinvest them yourself. But then you’d have the $9.99 commission fee each time.

Someone correct me if there’s a *no-commission-fee* “ETF DRIP” out there that I don’t know about!

By: Matilda Greene

Matilda Greene — Thu, 12 Nov 2009 01:46:01 +0000

thanks for the great article