Answers to Five Common Questions About Dividend Reinvestment and Direct Stock Purchase Plans

Dividend reinvestment plans (DRPs) and direct stock purchase plans (DSPPs) are popular investment plans that enable investors to acquire shares of a company's stock and keep those shares directly on the company's records as a "registered shareholder" – without going through an intermediary such as a brokerage firm. The plans are sponsored by either the company or the company's transfer agent* and are administered by the transfer agent.

  1. What is the difference between a DRP and a DSPP?
    DRPs and most DSPPs reinvest dividends into a registered shareholder's account. The difference is that DRPs are available only to a company's existing registered shareholders – holders who already own shares directly with the company rather than through a broker. DSPPs allow investors to make an initial stock purchase, and thereby become a registered shareholder. DSPPs also allow participants to make ongoing stock purchases through the plan.
  2. What are the benefits of a DRP or DSPP?
    A DRP or DSPP allows investors to own shares directly with the company as registered shareholders rather than through an intermediary such as a brokerage firm. Being a registered shareholder means you are known to the company. This keeps you closely in touch with the company’s activities and allows you to receive important materials like proxy statements and voting cards directly from the company. DRPs and DSPPs also enable you to automatically reinvest dividends.
  3. How do I make ongoing purchases through a DSPP?
    Investors can make purchases via check or recurring electronic payments. Every plan has its own rules for purchase minimums and maximums as well as sales and transfers. Plan details are explained in each plan’s prospectus or brochure. You’ll be required to acknowledge having read those materials and agree to the terms and conditions before investing.
  4. If I enroll in a DRP or DSPP, do I have to commit all of my dividend proceeds to additional shares?
    It depends on the terms of the specific plan. Some plans offer or require “full reinvestment” in which all dividends are used to buy additional shares of the company’s stock.  Some plans offer a “partial reinvestment” option that allows investors to reinvest a defined percentage of each dividend. Most plans that allow both full and partial reinvestment also allow investors to change their investment election at any time – the plan materials will explain the reinvestment options.
  5. How do I enroll in a DRP or DSPP administered by Computershare?
    If based upon your own research and judgment you choose to enroll in a plan, you can enroll online through Computershare’s Investor Centre™ website. Or you can request a paper enrollment packet from Computershare via the Investor Centre website or by phone, and submit an enrollment form through the mail. Information on investment plans can be found on the Investor Centre website – just search on the company name or ticker symbol.

    Here’s how to enroll directly via the Investor Centre website:
  • If you’re already a registered shareholder of a company and you would like to enroll in its DRP, simply log into your account and visit the “My Profile” area of the site. From there click on the “Reinvest Dividends” button and follow the prompts.
  • New investors can enroll in a DSPP by providing the required information and funds (via check or electronic debit). Information on DSPPs offered by Computershare, as well as the brochure or prospectus for each plan, is available on the Investor Centre website to review. Once enrolled, you can select your investment options based on the individual plan options.

Computershare does not provide investment or tax-related advice and makes no recommendations with respect to enrollment in a DRP or DSPP or the purchase or sale of securities under such plans.

*Transfer agents that are banks are able to administer DRPs and DSPPs based on an exemption under Securities and Exchange Commission (SEC) rules. Computershare Trust Company, N.A. is a bank transfer agent.

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