About Dividend Reinvestment Plans

Dividend reinvestment plans are custom-made for long-term buy-and-hold investors. Instead of sending participating investors cash dividends, the company applies those dividends to the purchase of additional company shares. 
 
There are several advantages to stock market investors who participate: Dividend payments are put to work, transaction costs are eliminated or held to a minimum, and the additional shares are purchased gradually over time—an easy-to-implement form of dollar cost averaging.