Procter & Gamble (P&G) is one of many companies that offers investors, particularly small investors, a convenient and affordable way to invest in company stock. Procter & Gamble’s plan is called a Shareholder Investment Program. Investors may participate in this plan without previously owning a single share of the company’s stock, and they may choose to receive any dividends in cash or in the form of additional shares of Procter & Gamble stock.
Investing through Procter & Gamble’s Shareholder Investment Plan
Complete details on how to invest directly with Procter & Gamble are available in the plan prospectus, which can be downloaded from the P&G website. Important highlights from the prospectus available online in September 2008 are:
- The initial required investment by those who are not currently shareholders is $250.
- Subsequent investments after enrollment should be $50 or more.
- Investments can be made by check, money order, or direct deposit from checking or savings.
- P&G’s Shareholder Services administers the plan, and J.P. Morgan Securities, Inc. is the agent for stock transactions.
- There is no administrative fee for enrollment or for reinvesting dividends.
- Maximum annual investment is currently $6,000,000.
- For purchasing shares, the brokerage commission is only $0.02 per share.
- There is no fee for subsequent investments made via automatic withdrawal from checking or savings other than the $0.02 per share brokerage fee.
- Subsequent investments made via check or money order are subject to a $2.50 per investment administrative fee (unless made by an employee or retiree) plus the nominal $0.02 brokerage commission per share.
- Once an investor elects dividend reinvestment, future dividends are reinvested in whole or fractional shares of company stock.
- The company allows partial dividend reinvestment (i.e. a portion is paid in cash and the rest is reinvested).
How to Invest: Forms to Complete
Potential investors who are not employees of the company and do not already own shares of company stock, must do the following:
- Complete a New Account Application Form, including the substitute W-9 (on the same form).
- Make an initial investment of $250 or more. The company accepts check, money order, or direct deposit. To use direct deposit, investors must complete the Automatic Investment Form and indicate a bank account and an amount to draft.
- Mail the above document(s) to shareholder services.
How to Elect Dividend Reinvestment
After the enrollment forms are received and processed by the company, the investor will receive confirmation of enrollment in the plan by mail. At that point, the investor must mail back a completed dividend reinvestment authorization form signed by the account owner(s).
Contact Information for Procter & Gamble Shareholder Services
The Procter & Gamble Company
Shareholder Services
P.O. Box 5572
Cincinnati, OH 45201-5572
Interested in other low-cost investment opportunities? The Walt Disney Company and Wal-Mart also offer dividend reinvestment plans with low fees and reasonable minimum investments. Learn how to buy Disney stock or invest in Wal-Mart stock without a broker.
This article is meant to inform investors about the Procter & Gamble Shareholder Investment Plan and does not constitute investment advice. Investors considering an investment in Procter & Gamble may download financial reports and other filings from the U.S. Securities and Exchange Commission website.
Resource: Procter & Gamble website
Lena Gott - Lena Gott is a Certified Public Accountant who gives practical financial advice to her readers.
Comments