DRIP (Dividend Reinvestment Plan): Pros and Cons

A dividend reinvestment plan (DRIP) uses your dividend payments to buy more of the same stock or ETF. This allows your growth to compound without having to manually reinvest.

However, this means you won't receive your dividends as payments. DRIPs can also reduce your diversification, since it keeps investing in the same company.

Some well known companies that offer DRIPs are Coca-Cola, Procter & Gamble, and Realty Income.

Source:Wealth Face