DRIP Update

I have held a DRIP (Dividend Reinvestment Plan) in a few stocks since 2008. So time for an update.

China Mobile - CHL
I purchased 5.22 shares for $240 in 2008 and have reinvested the dividends. I now own 6.07 shares worth $326. 14% of the shares are from DRIP shares, and the return on my original investment is 36% (7.2% per year).

General Electric - GE
I purchased 73.75 shares for $1216 in 2008. I now own 85.81 shares worth $2119.48. 14% of the shares are from the dividend reinvestment plan, and the return on my original investment is 75% (14.9% per year).

My strongest performing investment in this group of DRIPs is ABV. The increase in shares is about the same, but a very strong increase in the stock price has made this a real winner for me.

Ambev, formally Companhia de Bebidas das Américas - ABV
I purchased 4.94 shares (24.7 shares after a 5:1 stock split in 2010) for $215 in 2008. I now own 28.36 shares worth $1088.90. 13% of the shares are from DRIP, and the return on my original investment is 506% (101% per year).

I chose to invest in ABV after visiting Brazil and finding their product everywhere. I recognized the company name when screening for available DRIP programs and chose to invest a few hundred dollars.

Overall, the stocks are adding 2.8% in new shares through DRIPs, plus the increase in the share price.  As time goes on, more and more of the shares will be from DRIPs. At some point down the road, I could either stop the DRIP, and take the dividends in cash, or sell the stocks entirely.

This post was featured in: The Wealth Builder Carnival #137, and Carnival of Personal Finance #425.

The Old and the New, investing in GE and CHL

I made my first stock picks this week. I used my RBC Access USA chequing account at BNY Mellon to open two stock accounts. One with General Electric (GE) and the other is an ADR (American Depository Receipt) with China Mobile (CHL).

Why GE? It's a good dividend paying stock, it's trading around its 52 week low, Warren Buffet bought into it, and over the long term it should do well, it appears well positioned to take advantage in new technology and renewables, along with its other strong businesses.

Why CHL? China Mobile is one of the largest telecoms in China, it's dividend policy is to pay 45% of profits to shareholders, trading at a 52 week low, and it's growing a huge subscriber base. More and more of China's people are moving into the middle class and CHL is a company that's poised to meet those needs. I've bought into an ADR, which is basically stock of a foreign company that's traded on the NYSE.