Dividend reinvestment plans (DRIPs) allow investors to buy additional shares in a company without paying brokerage commissions. There are now more than a thousand public companies offering DRIPs, including some of the biggest names in corporate America. To participate in a DRIP, you need to own at least one share of the participating company. The Moneypaper, a monthly newsletter that specializes in DRIPs, offers a Direct Stock Purchase Plan that helps subscribers buy that one share at a very low cost. For more information, call The Moneypaper at (914) 381-5400.
The Moneypaper recently listed the 22 low-priced DRIP stocks it considers most likely to reward the patient long-term investor. All boast a relatively long history of dividend payments. Many have increased those payouts consistently in recent years.According to The Moneypaper, the stocks in its low-priced portfolio have two other important pluses.
"In compiling this list we looked for companies in which insiders owned a significant percentage of the shares, on the theory that they will make decisions based on the prospect of success for their own investment, and thus for ours as well. Also we sought to diversify as much as possible by offering selections from almost all of the major industrial groups."
The Moneypaper's low-priced DRIP choices make up a balanced portfolio of stocks that all recently sold for around $20 a share or less. This means you could establish accounts in the entire portfolio for less than $600 through The Moneypaper's Direct Stock Purchase Plan.
The 22 selections:
AAR CORP., which sells, leases and services airplane parts.
ACME CLEVELAND, which makes products for the construction and maintenance of telephone systems.
AMCAST INDUSTRIAL, a leading manufacturer of technology-related metal products.
BLACK & DECKER, one of the best-known names in the do-it-yourself field.
BRUNSWICK, the largest U.S. manufacturer of leisure and recreational products.
CINCINNATI MILACRON, a major U.S. machine-tool manufacturer.
FAY'S, which operates drugstores, auto supply stores and office supply outlets in the Northeast.
FLOWERS INDUSTRIES, a bakery goods concern with 33 U.S. production plants.
HANDLEMAN, a wholesaler of recorded music, videos and books to K mart and Wal-Mart.
HANDY & HARMAN, a leading fabricator and recycler of precious metals.
HUFFY, a major U.S. bicycle manufacturer.
IBP, one of America's largest beef and pork processors.
ONEOK, a Southwestern utility with oil and gas production interests.
PALL CORP., a maker of fine disposal filters and other fluid-clarification equipment.
PHILADELPHIA SUBURBAN, a water utility that offers shareholders a 5 percent discount on reinvested dividends.
PORTLAND GENERAL, an electric utility with the highest recent yield in the portfolio.
RITE AID, the nation's fourth-largest drugstore chain.
ROLLINS TRUCK LEASING, the third-largest truck leaser in the U.S.
UNION CARBIDE, an internationally known producer of specialty chemicals and plastics.
WESTINGHOUSE, the electronics giant.
WHITMAN CORP., which owns Midas Muffler, Pepsi-Cola General Bottlers and Hussman, the refrigeration company.