Picking a Set-it and Forget-it Dividend Reinvestment Stock
Dividend investors are a rare breed who are able to delay gratification and invest for the long-term. One of the ways many investors automate some of their dividend investing plans is to enroll in a dividend reinvestment plan, or DRIP, through their brokerage firm. In a DRIP, you're passively investing in high-quality companies who pay you, the shareholder, dividends for your trouble. It's a way to harness the power of compounding to build future wealth. Don't just reinvest your dividends in any stock though. Before you start a DRIP, you need a good understanding of how to evaluate a stock for dividend reinvestment.
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The first necessary feature of a DRIP candidate is to hold status as a Dividend Aristocrat. Basically, this means that the company's stock is listed in the S&P 500 and has paid out, and increased, its base dividend for at least the past 25 years. It's no wonder there were only 57 companies that met those stringent criteria as of December 2019.
Source Fool.com
