Dow DRIPs - 1 thru 3 of 12 DSPPs
Dow DRIPs; 1 – 3 of 12
The Stock Market – When you hear people talk about the stock market being ‘up’ or ‘down’ what is generally being referred to is an index (a type of average) comprised of a group of stocks and whether that index, as expressed by a numerical value, has increased or decreased from a previous time frame.
Although there are many indices, two of the most commonly referred to are the Dow Jones Industrial Average and the S&P 500. The Dow Jones Industrial Average or more simply put, the Dow derives it’s numeric value from 30 stocks which represent very well established and mature companies. Such companies are commonly referred to as Blue Chip companies. As such, the Dow tends to be reflective of the economic health of the United States.
The S&P 500 provides another index which is derived from 500 of the largest companies traded in the US. While there are around 9,000 different companies available for trading, the 500 in the S&P make up in the neighborhood of around 80% of the total value of all 9,000 companies.
As a starting point for investing purposes we will focus on a subset of particular interest to investors of the 30 companies that make up the Dow.
Of those 30 companies, 27 of them offer DRIP programs however 15 of those 27 require that you already own a share of their stock before enrolling in their DRIP. The remaining 12 companies which offer DRIPs also offer DSPPs or Direct Stock Purchase Plans.
So, for my next four post concerning Dow DRIPs I will focus on those 12 companies. Due to time considerations, I will research three per companies per post in alphabetical order of company name. (should be fun – these are some GREAT companies!) The first three companies of study will be American Express (AXP), Caterpillar Inc. (CAT) and ExxonMobil (XOM).
American Express – AXP
T/A = Bank of New York - www.stockbny.com
American Express started doing business on March 28, 1850 and was first listed on the New York Stock Exchange on May 18, 1977.
Well, it looks like I’ll be editing this post as I gain new information. The Bank of New York is the transfer agent for AXP but it doesn’t appear that Direct Stock Purchase is available online via the Bank of New York. The initial purchase is not available via the Bank of New Yorks website.
As a standby I’ve gone to www.directinvesting.com where individual shares of a company may be bought for a modest fee. It seems a minimum of 10 shares are required before enrolling in the companies DRIP. However, my research indicates that AXP does have a DPP so I’ll have to get more information from the company.
I’ve called the Bank of New Yorks 800 number in hopes of ordering a prospectus but the recording I got didn’t seem to offer that option
(below is just info I need to help me follow up for additional info)
The Bank of New York
Shareholder Services Department - 12E
P.O. Box 11258
New York, New York 10286
Toll free: 1-800-463-5911
International: 1-212-815-3700
Hearing Impaired: 1-888-269-5221
www.stockbny.com
http://ir.americanexpress.com - investor relations set for AXP
I’m thinking of another subset which would consist of Dow stocks that can be wholly purchased via the companies DPP online. With that in mind I shall continue to the next company offering DSPs.
Caterpillar, Inc. (CAT)
Transfer Agent – Mellon, Mellon Investor Services
http://www.melloninvestor.com/newMISWeb/investors/index.asp
to purchase, click on the link above then click on the drop down menu and select “Find Direct Stock Purchase Plans” the next screen allows you to pick the beginning letter of the company you’re looking for so, in this case, select ‘C’ and Caterpillar will be the fifth company listed from the top of the list.
Alternatively, you can query CAT after the drop down menu selection
Minimum Initial Purchase $250
Electronic Purchase YES
Plan Type DSPP (Direct Stock Purchase Plan)
Caterpillar’s DSPP has several fees as part of their program. Sometimes, even with the fees a DSPP could be a good decision because the cost can still be quite low however, my initial impression of Caterpillars fees makes me think that the max fee charged by a broker like www.sharebuilder.com of $4 would be a better alternative. Non-the-less, here are the fees along w/ some additional information;
ENROLLMENT
Electronic purchase yes
Minimum initial purchase $250 (waived if one chooses to invest in periodic cash purchases with a min of $25/month for 10 months)
Max initial purchase no max
Discount on initial purchases 0%
Initial purchase trading fee $0.03/share
Initial electronic purchase service fee $15.00
Initial check purchase service fee $15.00
ADDITIONAL PURCHASES
Min periodic electronic purchase $25
Max periodic electronic purchase no max
Discount on periodic electronic purchase 0%
Periodic electronic purchase trading fee $0.03/share
Periodic electronic purchase service fee $1.00
Periodic check purchase service fee $2.50
DIVIDENDS
Dividend reinvestment trading fee $0.03/share
Dividend reinvestment service fee 5%, max = $3.00
Discount on dividend reinvestment 0%
Dividend reinvestment options(s) Full, Partial or None
Direct deposit of dividends Yes
SALES
Sales transaction service fee $15.00
Sales transaction trading fee $0.12/share
Additional note from the prospectus
“Shareholders owning less than 200 shares may enroll in full reinvestment at no transaction cost to the shareowner, have access to their account electronically over the Internet and will receive an annual statement.”
Also;
“While there is no cost to enroll in the Program, please refer to the Investor Services Program Fee schedule for more information on purchase, reinvestment and trading fees.”
CAT currently goes for about $66/share and pays a dividend of about 1.8% so the $0.03/share fees won’t add up to much even with purchases of several hundred dollars. The $15.00 initial service fee to get the account set up is a bit more substantial and the $1.00 or $2.50 charge for additional purchases; while not exactly ideal would be less than a $4.00 max charge on sharebuilder.com. The reinvestment fees are initially a bit annoying also but at $0.03/share and a 5% service fee, these would probably be rather minimal as well.
Since we seem to be using Sharebuilder.com as a benchmark against which to judge the value of this DSPP we should point out that if you make three securities purchases in a single month at Sharebuilder.com then you will pay a $12 total commission ($4 per transaction) However, for that same $12 you can enroll (for a single month only, if you wish) in their Standard Plan which allows six securities purchases which brings the price of Sharebuilder.com down to a mere $2 per transaction and no fees for dividend reinvestments. A standard plan w/ sharebuilder.com is probably the best way to purchase this stock for most people.
Exxon Mobil (XOM)
Transfer Agent = officially computershare.com but go to www.equiserve.com to purchase
The original transfer agent was Equiserve (www.equiserve.com) but they were bought by ComputerShare.com (www.computershare.com). However if you go to those two sites you will find two distinctly different websites with completely different stocks available. Apparently, even after the buyout of equiserve by computershare, the sites are nowhere near integrated.
Anyway, go to equiserve.com then click on Buy Stock Direct to find Exxon Mobil (which is now listed as #2 in the Top Ten Plans column, right under Wal-Mart)
Exxon Mobil has the kind of plan we like to see. They charge $15.00 plus $0.12/share for selling your Exxon stock. That’s it. No joke. To enroll in the plan, make additional purchases either by check or electronically (online via the transfer agent), to initially set up the plan and to have your dividends reinvested is all FREE (paid for by Exxon).
If you are already a shareholder you are eligible for their generous DRIP program and if you don’t have stock you can open a new account and enroll in their DRIP with either a one time purchase of $250 or make ongoing automatic investments of $50/month for 5 months.
All this can be done online by going to www.equiserve.com
To summarize; we looked at three companies which are reputed to have Direct Purchase Plans as well as Dividend Reinvestment Plans.
1. American Express AXP Bank of New York
2. Caterpillar, Inc. CAT Mellon Investor Services
3. Exxon Mobil XOM Equiserve (ComputerShare)
The jury is still out on American Express but it would appear that their DPP can not be initiated online. I was able to confirm Bank of New York as the transfer agent and you can access your AXP account via the Bank of New York website (www.stockbny.com) but I’m still looking into the details of their DPP.
Caterpillar, Inc. is easily found at their transfer agents site, www.melloninvestor.com
(home page> Investors> at drop down menu choose Find direct stock purchase plans)
Caterpillar has no shortage of fees and I had thought of dropping companies with so many different fees but, after summarizing ExxonMobil I think people will have a much better appreciation for a company like Exxon after seeing just how many fees other companies, such as CAT are capable of charging. Granted, in the big picture the fees charged by CAT are still quite modest and the $1.00 charge for additional electronic purchases is very cheap but, for the beginning investor their myriad of charges can be quite daunting.
ExxonMobil – thus far, XOM is the crown jewel for the individual investor looking for a great value when it comes to owning stock in a blue chip company. The only fee for XOM occurs when you sell your stock which means all the rest of your hard earned money goes straight into your investment! By the way, if you read through their prospectus, XOM will also charge you $25.00 if you write them a bad check. OK, so that’s ALL the fees.
For the next Dow DRIP post, 4 thru 6 of 12 DSPPs, we'll be looking at General Electric (GE), Home Depot, Inc. (HD) and International Business Machines (IBM)
The Stock Market – When you hear people talk about the stock market being ‘up’ or ‘down’ what is generally being referred to is an index (a type of average) comprised of a group of stocks and whether that index, as expressed by a numerical value, has increased or decreased from a previous time frame.
Although there are many indices, two of the most commonly referred to are the Dow Jones Industrial Average and the S&P 500. The Dow Jones Industrial Average or more simply put, the Dow derives it’s numeric value from 30 stocks which represent very well established and mature companies. Such companies are commonly referred to as Blue Chip companies. As such, the Dow tends to be reflective of the economic health of the United States.
The S&P 500 provides another index which is derived from 500 of the largest companies traded in the US. While there are around 9,000 different companies available for trading, the 500 in the S&P make up in the neighborhood of around 80% of the total value of all 9,000 companies.
As a starting point for investing purposes we will focus on a subset of particular interest to investors of the 30 companies that make up the Dow.
Of those 30 companies, 27 of them offer DRIP programs however 15 of those 27 require that you already own a share of their stock before enrolling in their DRIP. The remaining 12 companies which offer DRIPs also offer DSPPs or Direct Stock Purchase Plans.
So, for my next four post concerning Dow DRIPs I will focus on those 12 companies. Due to time considerations, I will research three per companies per post in alphabetical order of company name. (should be fun – these are some GREAT companies!) The first three companies of study will be American Express (AXP), Caterpillar Inc. (CAT) and ExxonMobil (XOM).
American Express – AXP
T/A = Bank of New York - www.stockbny.com
American Express started doing business on March 28, 1850 and was first listed on the New York Stock Exchange on May 18, 1977.
Well, it looks like I’ll be editing this post as I gain new information. The Bank of New York is the transfer agent for AXP but it doesn’t appear that Direct Stock Purchase is available online via the Bank of New York. The initial purchase is not available via the Bank of New Yorks website.
As a standby I’ve gone to www.directinvesting.com where individual shares of a company may be bought for a modest fee. It seems a minimum of 10 shares are required before enrolling in the companies DRIP. However, my research indicates that AXP does have a DPP so I’ll have to get more information from the company.
I’ve called the Bank of New Yorks 800 number in hopes of ordering a prospectus but the recording I got didn’t seem to offer that option
(below is just info I need to help me follow up for additional info)
The Bank of New York
Shareholder Services Department - 12E
P.O. Box 11258
New York, New York 10286
Toll free: 1-800-463-5911
International: 1-212-815-3700
Hearing Impaired: 1-888-269-5221
www.stockbny.com
http://ir.americanexpress.com - investor relations set for AXP
I’m thinking of another subset which would consist of Dow stocks that can be wholly purchased via the companies DPP online. With that in mind I shall continue to the next company offering DSPs.
Caterpillar, Inc. (CAT)
Transfer Agent – Mellon, Mellon Investor Services
http://www.melloninvestor.com/newMISWeb/investors/index.asp
to purchase, click on the link above then click on the drop down menu and select “Find Direct Stock Purchase Plans” the next screen allows you to pick the beginning letter of the company you’re looking for so, in this case, select ‘C’ and Caterpillar will be the fifth company listed from the top of the list.
Alternatively, you can query CAT after the drop down menu selection
Minimum Initial Purchase $250
Electronic Purchase YES
Plan Type DSPP (Direct Stock Purchase Plan)
Caterpillar’s DSPP has several fees as part of their program. Sometimes, even with the fees a DSPP could be a good decision because the cost can still be quite low however, my initial impression of Caterpillars fees makes me think that the max fee charged by a broker like www.sharebuilder.com of $4 would be a better alternative. Non-the-less, here are the fees along w/ some additional information;
ENROLLMENT
Electronic purchase yes
Minimum initial purchase $250 (waived if one chooses to invest in periodic cash purchases with a min of $25/month for 10 months)
Max initial purchase no max
Discount on initial purchases 0%
Initial purchase trading fee $0.03/share
Initial electronic purchase service fee $15.00
Initial check purchase service fee $15.00
ADDITIONAL PURCHASES
Min periodic electronic purchase $25
Max periodic electronic purchase no max
Discount on periodic electronic purchase 0%
Periodic electronic purchase trading fee $0.03/share
Periodic electronic purchase service fee $1.00
Periodic check purchase service fee $2.50
DIVIDENDS
Dividend reinvestment trading fee $0.03/share
Dividend reinvestment service fee 5%, max = $3.00
Discount on dividend reinvestment 0%
Dividend reinvestment options(s) Full, Partial or None
Direct deposit of dividends Yes
SALES
Sales transaction service fee $15.00
Sales transaction trading fee $0.12/share
Additional note from the prospectus
“Shareholders owning less than 200 shares may enroll in full reinvestment at no transaction cost to the shareowner, have access to their account electronically over the Internet and will receive an annual statement.”
Also;
“While there is no cost to enroll in the Program, please refer to the Investor Services Program Fee schedule for more information on purchase, reinvestment and trading fees.”
CAT currently goes for about $66/share and pays a dividend of about 1.8% so the $0.03/share fees won’t add up to much even with purchases of several hundred dollars. The $15.00 initial service fee to get the account set up is a bit more substantial and the $1.00 or $2.50 charge for additional purchases; while not exactly ideal would be less than a $4.00 max charge on sharebuilder.com. The reinvestment fees are initially a bit annoying also but at $0.03/share and a 5% service fee, these would probably be rather minimal as well.
Since we seem to be using Sharebuilder.com as a benchmark against which to judge the value of this DSPP we should point out that if you make three securities purchases in a single month at Sharebuilder.com then you will pay a $12 total commission ($4 per transaction) However, for that same $12 you can enroll (for a single month only, if you wish) in their Standard Plan which allows six securities purchases which brings the price of Sharebuilder.com down to a mere $2 per transaction and no fees for dividend reinvestments. A standard plan w/ sharebuilder.com is probably the best way to purchase this stock for most people.
Exxon Mobil (XOM)
Transfer Agent = officially computershare.com but go to www.equiserve.com to purchase
The original transfer agent was Equiserve (www.equiserve.com) but they were bought by ComputerShare.com (www.computershare.com). However if you go to those two sites you will find two distinctly different websites with completely different stocks available. Apparently, even after the buyout of equiserve by computershare, the sites are nowhere near integrated.
Anyway, go to equiserve.com then click on Buy Stock Direct to find Exxon Mobil (which is now listed as #2 in the Top Ten Plans column, right under Wal-Mart)
Exxon Mobil has the kind of plan we like to see. They charge $15.00 plus $0.12/share for selling your Exxon stock. That’s it. No joke. To enroll in the plan, make additional purchases either by check or electronically (online via the transfer agent), to initially set up the plan and to have your dividends reinvested is all FREE (paid for by Exxon).
If you are already a shareholder you are eligible for their generous DRIP program and if you don’t have stock you can open a new account and enroll in their DRIP with either a one time purchase of $250 or make ongoing automatic investments of $50/month for 5 months.
All this can be done online by going to www.equiserve.com
To summarize; we looked at three companies which are reputed to have Direct Purchase Plans as well as Dividend Reinvestment Plans.
1. American Express AXP Bank of New York
2. Caterpillar, Inc. CAT Mellon Investor Services
3. Exxon Mobil XOM Equiserve (ComputerShare)
The jury is still out on American Express but it would appear that their DPP can not be initiated online. I was able to confirm Bank of New York as the transfer agent and you can access your AXP account via the Bank of New York website (www.stockbny.com) but I’m still looking into the details of their DPP.
Caterpillar, Inc. is easily found at their transfer agents site, www.melloninvestor.com
(home page> Investors> at drop down menu choose Find direct stock purchase plans)
Caterpillar has no shortage of fees and I had thought of dropping companies with so many different fees but, after summarizing ExxonMobil I think people will have a much better appreciation for a company like Exxon after seeing just how many fees other companies, such as CAT are capable of charging. Granted, in the big picture the fees charged by CAT are still quite modest and the $1.00 charge for additional electronic purchases is very cheap but, for the beginning investor their myriad of charges can be quite daunting.
ExxonMobil – thus far, XOM is the crown jewel for the individual investor looking for a great value when it comes to owning stock in a blue chip company. The only fee for XOM occurs when you sell your stock which means all the rest of your hard earned money goes straight into your investment! By the way, if you read through their prospectus, XOM will also charge you $25.00 if you write them a bad check. OK, so that’s ALL the fees.
For the next Dow DRIP post, 4 thru 6 of 12 DSPPs, we'll be looking at General Electric (GE), Home Depot, Inc. (HD) and International Business Machines (IBM)
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