A DRIP automatically reinvests dividend payments to purchase additional shares of the same stock, compounding returns over time without manual intervention.
New Shares = Dividend Payment / Stock Price at Ex-Date
If you own 100 shares at $50 with a $1 annual dividend, you receive $100 in dividends. DRIP reinvests this to buy 2 additional shares, which then earn dividends themselves.
AllInvestView tracks DRIP transactions. Read our complete DRIP investing guide for strategies and examples.