DRIP
Also written as: DRIP — Dividend Reinvestment Plan
Abbreviation for Dividend Reinvestment Plan, a programme that allows shareholders to automatically reinvest cash dividends into additional shares of the issuing company.
Full Definition
A Dividend Reinvestment Plan (DRIP) enables shareholders to use cash dividends declared by the company to purchase additional shares—often at a slight discount and without brokerage commissions—rather than receiving the dividend as cash. DRIPs may be administered directly by the transfer agent (direct DRIP) or through a broker. They may also offer optional cash purchase provisions. In editorial contexts, 'DRIP' is written in all capitals as an acronym; its full form should be spelled out on first use. Editors should note that 'DRIP shares' or 'DRIP purchases' are standard compound constructions.
Usage
Usage note: Always render in all capitals. Distinguish from DRS (Direct Registration System). Note that some companies offer a combined DRIP/DSPP (Direct Stock Purchase Plan) administered by the transfer agent.
In Context
- "Eligible shareholders may enrol in the company's DRIP by completing the enrolment form available through the Transfer Agent's website." — Annual report / shareholder letter
- "DRIP shares purchased during the quarter were credited to participants' accounts at an average price of $42.17 per share." — Transfer agent activity report