Direct Stock Purchase

July 09 updates to my DSP portfolio

2009-07-14T16:01:00.000-07:00

I continue to make positive strides in my DSP portfolio. Here is an update on how my portfolio has done since my last post in May.

As with May, Oshkosh and Office Depot continue to be the leaders with the best returns. Texas Instruments has also turned a corner for the positive. The returns for PNM Resources and Oneok, Inc. have also improved since May. The new kid on the block, General Mills, has also performed well. Paychex is the only investment that has struggled since May.

As my previous post stated, I also added Cash America International (CSH) to my DSP portfolio, however, with only two months worth of purchases I have not included data for it in the above spreadsheet.

In June I suspended additional (direct monthly) investments in Oshkosh, Office Depot, and PNM Resources until some point in the future.

Additionally, utilizing the monies made available due to suspension of the above mentioned monthly investments, I initiated new investments in 3 more companies:
Conoco Phillips (COP) (Google Yahoo Earnings Chart)
CVS Caremark Corporation (CVS) (Google Yahoo Earnings Chart)
Flower Foods, Inc. (FLO) (Google Yahoo Earnings Chart)

More on Flower Foods, Inc in the next post.

May 09 updates to my DSP portfolio

2009-03-19T15:49:00.000-07:00

It has been 10 months since my last post. The nice part about writing this blog is that I can go back and read my thoughts from last year and laugh at them. I can see that I was completely wrong with my analysis on where the market stood, when I thought the likes of Oshkosh, Office Depot and Texas Instruments were at historic lows. Back then I was also considering investing in DSP plans in the financial sector, such as WAMU, BOA, Lehman Brothers. Am I glad I did not step into any of those direct stock plans.

However, the market deterioration since last July has not deterred me from continuing to invest in the direct stock purchase plans I had initiated last summer. I am continuing to dollar cost average my stake in the following stocks.

I add two more companies to my basket, General Mills (GIS) (Google Yahoo Earnings Chart) and Cash America International (CSH) (Google Yahoo Earnings Chart).

You are probably wondering how I have fared since last July? Is there really a benefit to dollar cost averaging? Let me show you how I have fared. If I simply compare my initial purchase price for these stocks (purchase price associated with my first purchase in each DSP) with the current price (as of May 27, 2009) here is how I fared:

Note - I have only listed new stocks I initiated last July.

Now, if you factor in dollar cost averaging, here is how I have really fared:

The higlighted columns shows the relevant data.

My worst investments have been PNM Resources and Oneok, Inc. The remaining 4 have not yielded terrible results. Two of them, Oshkosh and Office Depot, are in the positive. I am not sure I would have been able to achieve the same by attempting to time the market. Considering how bad my analysis was last year, as to where the market stood, I am confident that I would have failed to time the market. I am quite happy with how my DSP portfolio has fared in the last year.

July 08 updates to my DSP portfolio

2008-07-21T18:42:00.000-07:00

With the market in correction, I couldn't help but consider opening new positions in some solid companies that offer inexpensive DSP plans. This market is going to turn around at some point. I am no economist nor am I an investment professional. I do not know what will shift the balance to the positive side. Whether it is oil price speculation correcting itself, the dollar appreciating, the housing market stabilizing, the credit crunch easing, I am not sure. What I do know is that this market will turn around. It did it 2000, following the dot-com burst and it will after the current crunch. I cannot predict a time line for a recovery, for that matter, I am not too worried about the time line itself. My investing horizon is long (10~15 years) and I have enough time for a recovery and forward growth. The current market condition brings to mind one of Warren Buffett's quotes, when he said "Be fearful when others are greedy and be greedy when others are fearful." I have had my share of lousy luck being greedy. I have never timed the market correctly, and I really should not have tried. I have fared much better when I have diligently and in a disciplined manner bought shares of an undervalued company at periodic intervals over a period of time. My motto right from childhood has been 'Slow and steady wins the race'. It is obviously taken from the story about the Hare and the Tortoise but it applies to the investing world as well. Dollar Cost Averaging helps to make investing affordable for those of us that do not have thousands of dollars in one shot to invest in multiple stocks. It also helps to keep the cost of investing low and is designed to even out the purchase price due to market inefficiencies. As long as the company fundamentals are good/strong, dollar cost averaging is the best way to reduce the risks of trying to time the market. By participating in multiple DSP plans I am also able to effectively diversify my portfolio.

Well, enough of my rant on dollar cost averaging and portfolio diversification, I am sure you all have heard that argument many times before.With that in mind I ventured out to the various DSP Plan websites. I came across one of my old favorites, Paychex (Amstock). Earlier this month I had noticed that Paychex was trading at it's year low. In fact, the current price for Paychex is close to the price I paid for it in early 2005. I participated in the Paychex DSP plan previously from 2004 through 2007. I started accumulating in 2004 and continued through 2007, selling some in 2006 (to finance the purchase of our house) and the rest in 2007 (to finance some urgent international trips). Except for the fees I paid when I sold the shares I did not pay a transaction fee for the monthly purchase. That’s a pretty good deal.

I re-initiated my monthly investment plan by signing up for an automatic debit of $150 from my checking account.

I also found a few other DSP plans that I believe would be good investments under the current market conditions:

(Click on the link to access specific plan information)

Oshkosh Inc. (Computershare)
Texas Instruments (Computershare)
Office Depot (Mellon Investor Services)

All of these are mature, well established companies.

Oshkosh makes commercial and fire trucks, and military vehicles. It has been around since 1917 and is currently struggling with lower-than-expected sales and a gloomy forecast for the 3rd quarter. I expect the stock to languish in the $17 to $20 range for the next 6 months or so until the end of the 4th quarter. That would give me some buying opportunity over the next 6 months and further.

Texas Instruments makes chips and calculators, to put it simply. It is almost 80 years old and the first chip design from TI came 50 years ago. Unlike some of the other technology giants like Intel, Cisco, IBM you won't hear much about TI but it is the market leader in what it does. It is priced quite attractively right now at ~ $24.

Office Depot is a supplier of office products and services to individuals and businesses. To my surprise Office Depot has been expanding internationally through investments in China, India, South Korea, Israel and others. I think these investments will pay off in the long run. Among the 3 companies I have mentioned here I am most concerned with Office Depot’s ability to turn around. There are some legitimate concerns about management quality at Office Depot, compared to Oshkosh and TI. However, the price is what attracted me. At around $7 it looks like a bargain.

That brings my DSP participation to 8

I am looking to invest into a couple more stocks offering DSP plans. Will need continue doing my research over the next 2-3 weeks to identify them. I have been thinking about diversifying into the financial sector. All of the major financial institutions such as BOA, Wachovia, WAMU, and Lehman Brothers offer DSP plans. Any suggestions?

Update to Computershare Customer Service Experience

2008-07-21T18:07:00.001-07:00

For those that do frequent my blog for updates, I apologize for not adding any new posts since April. As in the past, family commitments and an overseas trip prevented me from adding new posts. When I returned from my overseas trip at the end of May I had a letter in the mail from Computershare apologizing for the mix-up. The ID issue was rectified and my Oneok Inc. (OKE) (Google Yahoo Earnings Chart) portfolio is now available online via account access. It did take quite some time (~ 2 months) to rectify the issue but now it's a thing of the past.

I have since added one more DSP to my Computershare portfolio and this time I did not experience any delay in being able to access my new portfolio online. More on new purchases in the next post.

Lousy customer service from Computershare. You be the judge!

2008-04-15T11:44:00.000-07:00

In one of my earlier posts titled ‘It’s been a long time’ I mentioned that I had signed up for a new plan in February for Oneok Inc through Computershare. I highlighted Computershare in my very first post as one of few DSP administrators/transfer agents. I have had accounts with Computershare in the past, including Exxon Mobil, Aqua America, Pfizer, IStar Financial, and Equity Office Properties. My accounts with them go back to the year 2000 when I opened them with Equiserve. Equiserve was subsequently purchased by Computershare a few years back and all of my accounts were seamlessly transitioned to Computershare. I have had no complaints with Computershare since the transition until what has transpired the last few months. Let me highlight the key events that have occurred in the process of signing up for the Oneok Inc. DSP account.

Early February: Using existing online account, completed application for Oneok Inc. DSP plan. Initial Investment of $250 directly debited from checking account.

Mid February: Received W-9 form from Computershare to certify U.S. Tax Payer ID. Completed form and returned to Computershare

End of February: Monthly purchase cash debited from checking account directly to Computershare.

End of February: Completed W-9 form was returned to me, indicating that account could not be located. Mind you, this is a Computershare generated/initiated W-9 that was mailed to me.

Through out February I made several attempts to use Computershare’s online account access tool but to no avail.

Month of March: I have made 3 calls to customer service, once every week and during the first 2 calls I was told the same thing. My account ID has an invalid format and needs to be corrected. The customer service rep could not correct the ID format and needed to check with their supervisor. Each of the first 2 calls ended with a promise that a supervisor would call me back with a resolution. That did not happen after either of the first two calls.

End of March: Monthly purchase cash debited from checking account directly to Computershare.

End of March: When I called for the third time, the representative was about to get into the same routine of looking into the problem when I cut her off and asked to be connected to a supervisor.

I talked to her supervisor, who did remember reviewing my account from one of my previous calls. She promised to call me back with an update. She did call me back the same day to let me know that Help Desk is currently on the problem and is expected to fix the problem by the end of the day. She mentioned that several accounts have been affected by the problem.

April: It has been 3 weeks since that conversation with the supervisor. I have yet to receive an update on the status of my account. I called the supervisor on April 3 to find out the status my account but was only able to leave a voicemail. I have not heard back from the supervisor yet.

Out of curiosity I have been routinely accessing the online tool to update accounts and they still cannot locate my Oneok Inc. account.

Conslusion:
I am to believe now that poor customer service is pervasive throughout the company. At least they are consistent in their methodology. Every customer service individual I have talked to has failed to communicate effectively to me. They have all failed to keep one of the most important tenets of customer service, fulfilling a promise to a customer. They all promised to call back with an update, but have never called back.

I am not expecting them to have perfect tools in managing their accounts. I work in IT and I know too well the occassionally glitches in account management tools. I do not doubt that Computershare is working towards a fix for the faulty account numbers so I am not questioning their attempts to fix the problem, just their ability to provide customer service.

Eyeing a few good DSP plans

2008-04-08T17:52:00.000-07:00

I have been on the look out for a few good stocks with a DSP plan. The one stock that I have had in my tracking portfolio since last year is:

Omnova Solutions (OMN) (Google Yahoo Earnings Chart)

I began tracking Omnova, a small cap stock, starting April of last year when it was priced at $5.30. I had completed a New Account Application for Omnova under the then Bank of New Your Direct Stock Purchase Plan. I had signed up for monthly purchase of stock via direct debit from my checking account but had failed to enclose a check for the initial investment of $510.00. I assumed that the initial investment would also be directly debited from my checking account. However, the new account application came back with a letter stating that the check for the initial investment was not enclosed. I got sidetracked for a good part of 2007 from April through October due to family obligations so I never returned the application with the check. The company caught my eye again earlier this month when it released 1st Qtr 2008 results and the stock fell by almost 10%. It has since bottomed further to $2.98 (EOD April 11, 2008). That's a good 47% drop since I first looked at it last April.

After reviewing the 1st Qtr results here is my conclusion:

Positives:

Net sales rose 16% for the first quarter to $190.6 million from $164.8 million last year
Net loss narrowed to $3 Million compared to a loss of $ 5.1 Million last year
Operating profit of $2.5 million, down only $0.3 million despite $5.9 million higher raw material cost

Negatives:

Raw material cost higher compared to last year
As a consequence of increased raw materials cost the cost of goods sold increased 19%

All in all, it was not a bad quarter. There was not a lot of guidance provided for the remainder of the year but my guess is that costs will continue to be high, possibly increasing even more. I am keen on initiating a purchase in OMN using the DSP plan offered through BNY Mellon Shareowner Services. My timeframe for accumulating and holding the stock would be 2 years at the minimum. Here is the link to the InvestDirect Search page at BNY Mellon.

https://vault.melloninvestor.com/jsp/enroll/Search.jsp

You can view the Omnova Solutions plan under the letter O. The plan highlights are:

Minimum Initial Investment: $500
Initial Check/Electronic Purchase Service Fee: $10
Initial Purchase Trading Fee: Company Paid

Minimum Periodic Electronic Purchase: $50
Periodic Check/Electronic Purchase Service Fee: Company Paid
Periodic Purchase Trading Fee: Company Paid
Dividend Reinvestment Service Fee: Company Paid
Dividend Reinvestment Trading Fee: Company Paid

Sales Transaction Service Fee: $10
Sales Transaction Trading Fee: $0.10/share:

It is a fairly inexpensive DSP plan. The only cost to participate in the plan is the initial purchase fee and the sales service/trading fee. There is no cost to periodic monthly purchase or reinvestment of dividends.

Cost Basis Calculator

2008-03-29T08:17:00.000-07:00

When you invest in a DSP or DRIP plan one of the challenges is to calculate the Cost Basis of the purchased shares when it comes time to sell all or a fraction of the shares. I did some selling in 2006 and quite a bit of clean up towards the end of 2007. I just completed my 2007 taxes last week and used a Cost Basis Spreadsheet I had created a couple of years ago to calculate my cost basis and net gain/(loss) for the shares I sold in 2007.

Below is an image of the spreadsheet I had put together. Click on the image to view a full screen. It is a fairly simple spreadsheet that shows my purchases and sale of shares in Schnitzer Steel. I categorized the cost basis and gain/(loss) calculation into short term and long term.

If you would like a copy of the spreadsheet shoot me an email (there is a link in my complete profile) and I will send it to you.

It's been a long time

2008-03-27T14:52:00.000-07:00

It has been a long time since my last post. Had a lot of family health & financial issues to deal with. Things have improved over the last few weeks and I am finally finding time to get back to updating my blog. Since last August I have pared back my holdings, both in Direct Stock Purchase (DSP) plans and Brokerage accounts. By the end of last year I had reduced my DSP holdings from:

Aqua America (Google Yahoo Earnings Chart)

Caterpillar (Google Yahoo Earnings Chart)

Duke Energy (Google Yahoo Earnings Chart)

Exxon Mobil (Google Yahoo Earnings Chart)

Paychex (Google Yahoo Earnings Chart)

Pfizer (Google Yahoo Earnings Chart)

Limited Inc. (Google Yahoo Earnings Chart)

Duke Energy (Google Yahoo Earnings Chart)

Pfizer (Google Yahoo Earnings Chart)

Last month I signed up for two new DSP plans:

Oneok Inc. (Google Yahoo Earnings Chart)

PNM Resources Inc. (Google Yahoo Earnings Chart)

Among the above 4 DSP plans I currently participate in, on a monthly basis I contribute:

$75 to Duke Energy
$75 to Oneok Inc.
$100 to Pfizer
$100 to PNM Resources

On a related note, I opened custodial accounts for my children, one in Scottrade and one in Sharebuilder. I took advantage of the Costco special for new Sharebuilder accounts. Click here to read more about this special offer to Costco members. Costco members who open new individual, joint or custodial accounts with ShareBuilder will receive a $55 cash bonus deposited to their Sharebuilder account.

I bought shares for the following two companies in the custodial accounts:

Manitowoc Company (Google Yahoo Earnings Chart)

Perficient, Inc. (Google Yahoo Earnings Chart)

Today's Progress

2007-08-20T20:50:00.000-07:00

Part 1
Over the weekend I began reading 'The Dhandho Investor: The Low - Risk Value Method to High Returns' by Mohnish Pabrai. Mr. Pabrai is the managing partner of Pabrai Investment Funds. Since it's inception in 1999 the fund has returned an average of 29% annually. He is a value investing guru and considers Warren Buffet and Benjamin Graham as his mentors. You can read more about the book at Amazon if you click the picture of the book below. I had read some good reviews about the book and since I consider myself to be a value investor, I decided to pick up the book for a read. I have made it through the first several chapters and am certainly enjoying the book so far. In one of the chapter he quotes Warren Buffet. "Be fearful when others are greedy and greedy only when others are fearful" I couldn't agree more with the Oracle. I can personally relate to his thoughts. There are times I have been greedy when others in the market have been greedy and I have been burned. There are times when others are fearful and I have watched from the sidelines (enough examples here with Research in Motion (RIMM), Merck (MRCK), Corning (GLW), etc).

Is this the time to be greedy? What do you think? I think it is time to get started, time to get all of your ducks (moola) in a row. The market has corrected itself by about ~ 10%. There probably will be some more correction but I think it is time to get prepared to make those bargain bin purchases.

Part 2
One of those bargain bin stocks I have been tracking for the past several months is Limited Brands (LTD) (Google Yahoo Earnings Chart) Why Limited? Who does not know Limited? Okay, maybe some of you have not heard of them. If you haven’t heard of Limited, I am sure you have heard of Victoria Secret or maybe walked past a Bath and Body Works. Limited sells women's and men's apparel, lingerie, beauty and personal care products through retail stores, online, and catalog. The Company recorded sales of $11 billion in 2006 and currently has a 2.67% dividend yield. It certainly has had its share of troubles, like most other retailers, but some of the recent developments have made me optimistic about its future. Limited is certainly doing everything it can (in my opinion these changes are a catalyst for turnaround) to become leaner and focus on a smaller subset of brands. Limited has divested it's majority stake in both Limited and Express brands. It has also announced and initiated a $1 billion stock repurchase program. All in all, I believe LTD has the potential to show a healthy growth in the next several years.

So, I took the plunge. I logged into http://www.stockbny.com/ and opened an account for The Limited Brands. The minimum initial investment amount to open an account for LTD is $200 with an initial fee of $10. I was able to sign up for direct debit from my checking account. I also signed up for the Automatic Dividend Reinvestment option (free) and also signed up for Monthly Purchase Plan ($100 each month) for no fee.

It will take a few days for the direct debit of the initial amount and a few more days for BNY to make the stock purchase. I can now move on to tracking other DSP plans to invest into.

Some Q & A

2007-08-17T19:20:00.000-07:00

Over the last couple of weeks I have received a few questions regarding DSP/DRIP plans. While answering these questions I realized that I had the same questions a few years ago while I was learning more about these plans and discovering the various transfer agents that offer these plans. I thought these questions would be helpful to anyone out there interested in DSP/DRIP plans.

Anyway, here goes:

Q: I just read your post on purchasing DRIP stocks and was wondering what you could tell me about how much your monthly investments are costing you in terms of commission or other costs. I'm 18 years old and a startup value investor who just wants to find a place better than a bank account to stick some of my money.

A: I currently hold 5 DSP/DRIP plans, Duke Energy, Paychex, Pfizer, Aqua America & Caterpillar. I allocate $500 across these 5 plans, approx $100 per stock. Among these five, I only pay a commission on Caterpillar which is $1 every month. The remaining 4, all excellent stocks, do not charge me anything for my monthly purchases. I have set up automatic debit from my checking account so the amount of effort on my part is pretty much none. Another example is Sonoco (SON), I bought into the plan in July 2005 and had to close out in May of this year. Over the 22 months, that I held the stock, I bought additional shares every month for no fee. I paid a $10 initial set up fee and no sale fee (none whatsoever). My total return for that period was 35% before taxes.

In some cases my total costs have been higher, for e.g. I held Exxon for over 5 years selling on two occasions (sold a portion in 2006 and the remaining in 2007). I paid no fee for monthly purchases for the 5 year period and paid $15 for my sale in 2006 and another $16 in 2007. A total of $31 is still a great deal for being able to buy shares monthly for over 5 years. I started purchasing Exxon when the share prices were in the 30s, 40s, 50s and eventually sold in the 60s and 70s. You can see how well dollar cost averaging works with DSP/DRIP.

Q: How has PFE done for you over the years and do you have any other recommendations on DRIP stocks? Obviously dollar cost averaging smaller stocks would be a whole lot cheaper for me than the ETF I am using right now.

A: PFE has been the worst of my performers. My return has been 2%, which is horrible. At times it has been frustrating holding this stock but I am a firm believer in buy and hold and more importantly I believe that this stock will return to it's glory days. My return is so low because I purchased PFE in 2001/2002 when the stock price was in the low 40s and high 30's. Since then the price has settled in the mid 20s. I would recommend anyone wanting to get in now, to do so without a second thought. For no initial set up fee and no ongoing purchase fee it's hard to beat an investment like PFE, with a 4.8% dividend yield.

My investments in Paychex, Duke, and Aqua America have fared much better, 22%, 45% & 18% respectively. I recently began investing in Caterpillar when the price dipped down to the high 50s/low 60s (in March). I started my investment in March and have been investing monthly and my return so far has been around 7%.

I have listed some other DSP stocks in my wish list on my blog if you would like to check them out. Omnova (OMN) in particular, looks very promising.

The next 2 questions address what I would call "two slightly difficult/atypical aspects of DSP/DRIP plans".

Q: After reading through your email and looking through your blog, I searched for a DSP/DRIP plan for companies I had already been interested in following, namely Johnson and Johnson (JNJ). As I found Johnson and Johnson has a plan very similar to the companies you mentioned. However, I do have a few questions about the specifics of DSP plans. 1. I noticed in the JNJ plan brochure that to be eligible for the plan I have to currently own the stock. So I am assuming that my first purchase in DSP plans will have to be through my broker, correct?
"Shareholders of Johnson & Johnson common stock holding stock certificates or shares in direct registration book-entry form are automatically eligible to participate in the Program.If you hold your shares with a broker, you can participate by instructing your broker to transfer the shares into your name. Program services are available to any shareholder of record, even if you own only one share."

A: Yes, you will have to go through a broker and have the broker transfer the share into your name. Now, that can be expensive/increase your commission fee since in addition to paying the typical commission to purchase the stock you will also incur an additional fee to transfer the share to your name. I believe the transfer fee is probably between $30 to $60 depending on the broker. It is also fairly time consuming (3-5 weeks). For both of these reasons I haven't pursued plans that require one to have a single share. I have always opted for ones that required an initial investment amount rather a single share. It's also been a few years since I have reviewed DSP plans requiring a single share, it may be worth a second look now.

One other option is to buy a single share from a place like Oneshare. I had read on Beginnersinvest.com that the share you purchase from oneshare allows you to subsequently participate in DSP/DRIP programs. I checked out JNJ for you on Oneshare and turns out it will be $100 to purchase a stock and have it transferred to you. A little pricey, what do you think? Maybe the brokerage is a better option.

Q: I also am wondering how taxes will work towards these DSP plans. Is it any different from regular stock tax forms in using the 1099-b form? I haven't even filled out a 1099-b for my regular stocks before, so I was wondering if I would be in for anything strange come tax time.

A: Taxes will be additional work. I can imagine it would be more work if you sell after having held on to the shares for a long time, say 15-20 years. On a yearly basis, if you haven't sold any shares then the only tax document you will receive is the 1099-DIV for the dividends. When you do sell your shares you will need to separate your gains into short and long term. Short term is any shares you purchased (on a monthly basis) starting less than a year ago and long term is any you purchased more than a year ago.

Tax year 2006 was the first time I had to do this. I had to create a spreadsheet to make it easier for me. Creating the spreadsheet took some time but once I had it working, the actual determination of gains wasn't that very time consuming. I will try to clean up the spreadsheet and put it on my blog in the next few months. At the end of the year I download the entire year's transactions to a spreadsheet so I have all of this data available to me at tax time.

Where to purchase direct stock plans from?

2007-08-04T20:05:00.000-07:00

Let me begin by listing some of the stock transfer agencies that administer and manage these direct stock purchase plans. In general these companies offer the following types of plans:

Direct Stock Purchase Plan (DSP or DSPP) with a minimum initial investment in '$$' and an additional investment option to purchase additional shares on an ongoing basis
Direct Stock Purchase Plan (DSP or DSPP) with a minimum initial investment in 'number of shares' and an additional investment option to purchase additional shares on an ongoing basis
Dividend Reinvestment Plan, popularly referred to as a DRIP, to participate in dividend reinvestment and the option to purchase additional shares through ongoing investment.
Dividend Reinvestment Plan (DRIP) exclusively to reinvest dividends only.

American Stock Transfer and Trust Company (http://www.amstock.com/)
Has hundreds of companies listed with initial minimum investment ranging from $25 to $1250. Some plans require ownership of 1 share. Clicking on this link, http://www.amstock.com/investpower/new_plandet2.asp?num=0, will take you directly to the page that lists all of the participating plans.
Pros:
Allows sorting of all plans by minimum investment amount or plan type
Cons:
Does not allow to sort or search plans by associated fees. For e.g. one cannot search for plans with no purchase or transaction fee.

Computershare (http://www.computershare.com/)
Also manages DSP & DRIP for Equiserve (http://www.equiserve.com/). Equiserve was acquired by Computershare in 2006 and all services have been rolled over to Computershare. Clicking on this link, https://www-us.computershare.com/Investor/Plans/PlansList.asp, will take you to the main investment plan page.
Pros:
1) Has a neat search tool to find plans by Company Name, Ticker Symbol, DSPP, DRIP, No Purchase Fee, Minimum Initial Investment, etc
2) Provides a quick snapshot page for each plan. For e.g. here is the snapshot page for the iStar Financial Inc. (SFI) plan.

The Bank of New York (BNY) Stock Transfer (https://www.stockbny.com/)
Similar to the previous two transfer agents, the BNY Stock Transfer also offers DSP/DSPP & DRIP plans. Clicking on the following link, https://www.stockbny.com/UI/Resources.aspx, will take you to the list of company plans offered by BNY. The list identifies whether the plan is a DSPP or a DRIP. The list is quite vast and sorting/searching/narrowing the list is not an option.
Pros:
1) Largest number of plans being offered by a transfer agent, including non-US companies
2) Completing an application online is an option for some of the companies
Cons:
1) Finding a company to match your style is like finding a needle in a haystack.
2) Narrowing the list to only DSPP or by investment amount or purchase fees is not an option. The only available sort option to limit the list to US or non-US companies. The company list from the above link does not lead you to an online application.
3) There is a separate company list view (https://www.stockbny.com/UI/Enrollment.aspx) which lists the initial minimum investment amount and also provides the link to completing an online application, however, this view does not identify the plan as a DSPP or a DRIP.
4) To surmise, there is no comprehensive view that lists the company, identifies it as a DSPP/DRIP, includes the initial minimum investment and also provides a direct link to an online application. You have to utilize the two views to help oneself through the process.

Mellon Investor Services (https://www.melloninvestor.com/)
Similar to all of the above transfer agents, Mellon offers both DSPP & DRIP plans. Click this link, https://vault.melloninvestor.com/jsp/enroll/Search.jsp, to connect to the Invest Direct Search. On this page you can then find a company by Name, Ticker Symbol or Industry Name. Alternately, you can choose the ALL link/option which will take you to the complete list of companies offered by Mellon. On the ALL company list view you have further options to narrow the list by one of many options.
Pros:
1) Presentation of the information is user friendly
2) Several search/sort options available. I would recommend accessing the ALL company list and then using the various search options to narrow the list to meet your specific needs

Direct Stock Purchase

2007-08-04T00:53:00.000-07:00

The purpose of this blog is to disseminate information on direct stock purchase plans offered by various companies. Typically, these are offered either directly by the company or via a stock transfer agent . Stocks can be bought directly, either for free (without any brokerage fees) or a small fee (usually $1 to $3). Some plans require you to own at least one share while many do not require you to own a share to begin investing. Typically, here is how the process works:

Contact company or stock transfer agent via their website
Open an account (individual, joint, trust, etc) for no fee or a small fee ($10 to $20) either online or via a completed application form
Meet initial minimum investment amount ($0 to $1000)
Purchase additional shares periodically, via an automated checking account debit plan or a one time payment
You can sell all or some shares for a flat fee ($10 to $15) and a brokerage fee (pennies per share).

I have found these plans to be well suited for my investment philosophy, which I'll call 'Slow and Steady". It is best suited for someone with a long term timeline and investing for a college fund or a retirement fund. It is not suited for someone with a shorter timeline.

Since 2001, which is when I first came across these plans and invested my first buck, I have invested in the following companies:

Aqua America (still own) (Google Yahoo Earnings Chart)
Caterpillar (still own) (Google Yahoo Earnings Chart)
Duke Energy (still own) (Google Yahoo Earnings Chart)
EquityOffice Properties (sold out 2006)
Exxon Mobil (sold out 2006) (Google Yahoo Earnings Chart)
Home Depot (sold out 2006) (Google Yahoo Earnings Chart)
Paychex (still own) (Google Yahoo Earnings Chart)
Pfizer (still own) (Google Yahoo Earnings Chart)
Schnitzer Steel (sold out 2007) (Google Yahoo Earnings Chart)
Sonoco (sold out 2007) (Google Yahoo Earnings Chart)
iStar Financial (sold out 2006) (Google Yahoo Earnings Chart)

You may be wondering why on one hand I would say that these plans are best suited for a long term timeline and on the other hand sell out on my stocks barely 5 years into the plan. We moved to California in 2005 and bought a house in early 2006 and needed much money for a down payment. I chose to sell out on some of the stocks. Why did I chose to sell those specific stocks and not others? I had various reasons, which I will delve into later.

For now, hopefully I have caught your attention and made you consider Direct Stock Purchase plans as an option to invest into your future, irrespective of what your goal is.

Adios for now. More real soon.