One great way to invest in the stock market is through a DSPP. What is a DSPP? A DSPP is a direct stock purchase plan. A direct stock purchase plan is a service offered by a company that allows investors to purchase shares of stock directly. Investors can avoid the middleman and purchase stock from the company itself. Companies will either administer these plans themselves or hire a transfer agent to manage them.
The biggest advantage of direct stock purchase plans is that investors can avoid paying brokerage commissions. Most brokers charge $9.99 and up to buy shares of stock. These costs can make it prohibitive for small investors to start investing. For example, it wouldn’t make sense to buy $50 of Pepsi stock each month through E*Trade since you would have to pay $9.99 for every purchase. You would be committing 20% of your investment to fees. In a direct stock purchase plan, you could make small $50/month purchases and skip the commissions.
Most DSPP’s charge a small one time fee to enroll in the plan. This fee is typically $10 and is well worth the cost. Some DSPP’s charge a small transaction fee. Some plans require as little as a $50 minimum to start investing and can go as high as $2,500. You can buy additional shares each month for just a few dollars if you choose.
Here are 30 major companies that offer direct stock purchase plans for a minimum investment of $250 or less.
ANHEUSER BUSCH INBEV
ARCELORMITTAL
BAIDU.COM, INC.
BRISTOL-MYERS SQUIBB COMPANY
CATERPILLAR INC.
CHEVRON CORPORATION
CHINA MOBILE
CONOCOPHILLIPS
GENERAL ELECTRIC COMPANY
GLAXOSMITHKLINE PLC
INTEL CORPORATION
J.C. PENNEY COMPANY INC
JPMORGAN CHASE & CO.
LOCKHEED MARTIN CORPORATION
LOWES COMPANIES INC
NOKIA CORPORATION
PEPSICO, INC.
ROYAL DUTCH SHELL
STAPLES INC
SUNOCO INC
TEXAS INSTRUMENTS INCORPORATED
TOYOTA MOTOR CORPORATION
U.S. BANCORP
UNITED PARCEL SERVICE, INC.
VERIZON COMMUNICATIONS INC.
WAL-MART STORES, INC.
YAHOO! INC
Not all companies offer a direct stock purchase plan. Visit the company’s website to see if they offer such a plan. It is normally found in the investor relations sections of the site. You can also visit transfer agents like Computershare and BNY Mellon. They manage a large amount of direct stock purchase plans.
I am a fan of direct stock purchase plans as they are one of the most cost effective ways to invest. They offer long term investors an easy way to load up on a company’s stock.
Are you a fan of DSPP’s or do you prefer investing with an online broker?
Photo by Katrina Tuliao
Investing In A Direct Stock Purchase Plan is a post from: Buy Like Buffett
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