Lux Investing

what are some good companies to invest in via drip programs?

I would like to buy stocks from companies directly and have the dividends reinvested, I am of course looking for companies that have strong upside potential. Is there a website that anyone knows of that could assist me with my search? Thanks

Public Comments

1. Avoid REITs. You will find that they have the highest dividend rate, but the real estate market is cooling off. When buying DRIPs look for companies that you can hold for the long term. Research some banks and utility companies.
2. Well, since this is economics, I'm required by tradition to say that everything everyone else has said is wrong, and that you should do just the opposite. I've invested in DRIP's for years. They're perfect for a well informed average investor who wants to see capital accumulation over time. Just make sure you pick a company that you feel comfortable will be there in 50 years (or however long away you're retiring). A great example is to buy Coke, or something similar. Many people bought Kodak for the same reason, but are now seeing that Kodak has been having significant trouble because it's main business (camera film) is literally becoming obsolete. So, go out, do some research, and buy a great company. John Slatter has a great series of books, called The 100 Best Stocks You Can Buy, 2005. Every year he writes a new one with the edition for that year. Go get it on Amazon, or somewhere similar. You'll find that many of the stocks that were in my book when I started in 1998 are still in this latest version. Also, there are many DRIP's in this Top 100!
3. I have been DRIP'ing GE, XOM, QCOM, and GGP for years. GGP is a REIT but it invests, builds, and manages shopping malls. It pays a 3.5% dividend and has risen 33% this year alone. XOM (Exxon) has gone up about 10% this year not including the 2% dividend. Equiserve and Mellon INvestors manages the DRIP programs for many companies. GE is managed through the Bank of NY. Not all companies have a direct stock purchase plan (I wish Starbucks did)..you can easily find out by going to the company's website and looking in the Investors section for information. YOu can always use sharebuilder if you want to DRIP stocks that don't have their own direct stock purchase plan. For research, you could check out investors.com or pick up the Investors Business Daily newspaper from the bookstore or request a free 2 week trial.