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take scrip/DRIP dividends when offered?

  • 11-09-2009 12:24pm
    #1
    willietherock
    Registered Users, Registered Users 2 Posts: 1,005 ✭✭✭


    Opening an online trading acc and have to answer this. Which is the easiest/less hassle option ?


Comments

  • #2
    soddy1979
    Registered Users, Registered Users 2 Posts: 284 ✭✭soddy1979


    Hi Willy,

    The easiest option is just to take cash. It eliminates any potential problems with an uncompetitive Scrip.

    A scrip dividend gives the dividend recipient the option to receive shares in lieu of the cash dividend at a price announced shortly after the dividend is announced. It can be uncompetitive if there is a fall in share price between announcement date and payment date. Although, some companies cancel scrip offers, such as CRH did last year.

    A drip dividend is where the recipient receives shares in lieu of cash that are purchased in the market as close to after payment as possible.

    I think if you can elect on a per dividend basis this may suit the best as it will allow you to take shares if you are bullish on a stock between scrip announcement and pay date.


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