Dividend Reinvestment Plan DRIP
A program that automatically uses your cash dividends to buy more shares of the same stock.
What it is
A Dividend Reinvestment Plan, or DRIP, takes the cash dividend you receive and immediately buys additional shares (including fractional shares) of the same company instead of paying you cash. DRIPs are offered either directly by companies or, more commonly today, by brokerages. Some company-run plans buy at a small discount to market price.
Why it matters
Reinvesting dividends compounds your position over time, since the new shares themselves pay dividends, and it removes the temptation to spend or mistime reinvesting. The tradeoff is that, in a taxable account, reinvested dividends are usually still taxed in the year received even though you got no cash.
How it's calculated
Not a formula. Each pay date, the plan divides your dividend by the reinvestment share price to determine how many (often fractional) shares to add to your holding automatically.
How Quintarthai uses it
DRIP execution happens at your broker, not on Quintarthai; to evaluate whether a payer is worth reinvesting in, study its dividend history and durability on the company deep-analysis page.