Implementing a High-Yield Screen to Invest in Stocks With DRPs
by John Bajkowski
Many individuals are attracted to companies with DRPs because these firms offer a low-cost approach to purchasing shares over an extended period of time. However, an investor should purchase and hold a company with a dividend reinvestment plan only if it is an attractive investment when considered against other investment opportunities. This article explores the overall characteristics of stocks with DRPs and shows how to implement a basic screen for firms with high dividend yields.
In this issue, the AAII Journal publishes a guide to companies offering dividend reinvestment plans (DRPs). The companies that offer DRPs can be accessed on AAII.com in the Investor Resources area.
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