Dividend Reinvestment Plans

[oldtech]

What opinions do others have of Dividend Reinvestment Plans. Do many NZX companies offer them? I am retiring in 3 years and am looking at options for passive income.

I don't know what the figures are, but I would say many - certainly not all - NZX companies offer DRIPs. Looking at my portfolio, 6 out of the 8 companies I am invested in are currently doing a DRIP.

I say "currently" because remember that sometimes a company will suspend their DRIP.

I participate in most of the DRIPs; not all because my budgeting is not always iron-clad and occasionally I need the dividend to repay a bank account that I borrowed some money from to buy a share that I was drooling over

If you have a REALLY small holding in a particular company, I guess the DRIP may not necessarily be the absolute best value, because depending on the company's policy you may find that your dividend is reinvested into X number of shares and there is a small remainder left over which you effectively lose. But as your holdings grow that effect would be diluted.