What is the difference between a Dividend Reinvestment Plan (DRIP) and a Direct Purchase Plan (DPP)?
A Dividend Reinvestment Plan is an investment plan available to existing, registered shareowners of a particular company. Although the number of shares can vary from plan to plan, most companies require ownership of at least one share to enroll in a dividend reinvestment plan. A Direct Purchase Plan has an “open enrollment” feature, which allows investors to purchase their initial share(s) of stock from the issuer rather than purchasing through a brokerage firm. Once enrolled in either plan, shareowners generally have the option to increase their ownership of stock through the purchase of shares with dividends and/or cash contributions. Some plans also offer shareowners automatic debits from their bank accounts to make cash contributions. It is important that you read the prospectus carefully before deciding to purchase or deciding which options are right for you.
