Buy stocks directly from companies
Investing wth DSPPs is a low-cost way to invest directly with a publicly traded company. These plans are generally set up directly with the company or are administered through a third party transfer agent. Using a direct stock purchase plan has advantages over both traditional and online discount brokers. First, these plans avoid sometimes costly commissions and fees charged by brokerage firms. Another important benefit of using a DSPP is the passive investing opportunities that come with them. Investors can usually set up an automatic investment which transfers money from a bank account and purchases shares with the money.
How Can I Purchase Stock Directly From a Company?
Company Filings More Search Options. Many companies allow you to buy or sell shares directly through a direct stock plan DSP. You can also have the cash dividends you receive from the company automatically reinvested into more shares through a dividend reinvestment plan DRIP. Direct Stock Plans — Some companies allow you to purchase or sell stock directly through them without your having to use or pay commissions to a broker.
But you may have to pay a fee for using the plan's services. Some companies require that you already own stock in the company or are employed by the company before you may participate in their direct stock plans. You may be able to buy stock by investing a specific dollar amount rather than having to pay for an entire share.
In that case, you could have your checking account debited on a regular basis to make investments in the plan. Some plans require a minimum amount of investment or require you to maintain specific minimums in your account.
DSPs usually will not allow you to buy or sell your securities at a specific market price or at a specific time. Rather, the company will purchase or sell shares for the plan at established times — for example, on a daily, weekly, or monthly basis — and at an average market price.
You can find when the company will buy and sell shares and how it determines the price by reading the company's disclosure documents.
Depending on the plan, you may be able to have your shares transferred to your broker to have them sold, but the plan may charge you a fee to do so. Dividend Reinvestment Plans — Dividend reinvestment plans let you take advantage of the power of compounding. Instead of receiving cash dividends from the company, you may purchase more of a company's stock by having the dividends reinvested.
You must sign an agreement with the company for this to be done. If you have a brokerage account or mutual fund, your firm may also have a dividend reinvestment plan. You should check with your firm or the company to see whether you will be charged for this service.
The features and services offered in DSPs vary depending on the kind of plan and the company offering the plan. Before setting up a plan, read the company's disclosure information to learn how its particular plan works.
The plan will tell you how to enroll, the number of shares needed to open an account, any fees or charges that apply, the minimum or maximum you can buy or sell, the dates when you can invest, and how to withdraw, transfer, or sell your shares. Many large companies have Internet sites that can provide you with information about their plans or tell you who to contact for more information.
Search SEC. Securities and Exchange Commission. Fast Answers. Here are descriptions of the two different types of plans: Direct Stock Plans — Some companies allow you to purchase or sell stock directly through them without your having to use or pay commissions to a broker.
There are a few circumstances in which a person can buy stock directly from a company, including direct stock purchase plans, DRIPs and. You can buy stocks without a broker by taking advantage of direct stock investing goal is to acquire a single company's stock as directly as possible, one of.
Company Filings More Search Options. Many companies allow you to buy or sell shares directly through a direct stock plan DSP. You can also have the cash dividends you receive from the company automatically reinvested into more shares through a dividend reinvestment plan DRIP. Direct Stock Plans — Some companies allow you to purchase or sell stock directly through them without your having to use or pay commissions to a broker.
You can set up an account by depositing cash or stocks in a brokerage account. If you prefer buying and selling stocks online, you can use sites like E-Trade or Ameritrade.
More than companies listed on major exchanges now offer small investors the option of buying stock directly from them. The types of companies you can buy stock directly from include big box stores, businesses in the restaurant industry and even some large manufacturers.
Direct Stock Purchase Plan
While many investors choose to buy and sell investments through a brokerage account , some investors may wonder how they can buy stocks without a broker. Direct investment plans offer the brokerage alternative that those investors are seeking. If your primary investing goal is to acquire a single company's stock as directly as possible, one of these plans can help you achieve that goal, but be aware of the drawbacks that come with avoiding brokerage services before you abandon them completely. Often, the easiest method of buying stocks without a broker is by participating in a company's direct stock plan DSP. These plans were originally conceived generations ago as a way for businesses to let smaller investors buy ownership directly from the company.
Buy Stock Direct
It's designed for individual investors who might otherwise avoid making small, long-term stock purchases because of large minimum brokerage fees. You always have control of your shares. You may withdraw your DSPP holdings of Home Depot stock at any time, or may ask the program administrator to sell your shares. Purchasing Stock If you do not already own Home Depot stock, or if your stock is held through a brokerage account, you may use the plan to buy your first shares directly from the Company. If you already own Home Depot stock, you may invest cash dividends and optional cash purchases in additional shares of Company stock. Transaction Fees For each transaction, a small service charge is deducted from your investment plus the pro rata amount of brokerage commissions generally 5 cents per share for purchases and 15 cents per share for sales. Service charges are:. Features at No Charge Through DSPP, you receive a stock safekeeping service and the ability to make transfers or gifts of Company stock - all at no charge. The recipient of the transfer or gift will have an account opened in their name and will enjoy full program benefits. You may automatically receive The Home Depot, Inc.
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Lowe's Companies, Inc. These plans are designed to provide individual investors with a convenient, low-fee method to become Lowe's shareholders and increase ownership of Lowe's common stock over time. Proceed to Computershare Web site. All rights reserved.
Advantages & Disadvantages of Stocks Directly From the Company vs. a Broker
There are a few circumstances in which a person can buy stock directly from a company. The following is meant to cover some of these instances, which include direct stock purchase plans , dividend reinvestment plans DRIPs , and employee stock purchase plans ESPPs. This is when a person buys stock directly from the issuing company. Several well-known companies will sell stock directly to individual investors. Most companies that offer this kind of purchase option don't charge investors a commission , and if they do, the commission or service charges is very low compared to buying stocks through a broker. If you're buying a very small number of shares and want to minimize your costs, a direct stock purchase is a great way to go. Investors who own shares in a company with a dividend reinvestment plan have the option of registering with the company and participating in the plan. Instead of receiving dividends from the company, DRIP participants' dividends go directly toward buying more stock in the company. As with direct stock purchases, there are often no commission charges associated with DRIPs. These shares are given directly from the company, and no commission fees are charged. These stocks can go directly into a retirement fund, so there's usually an opportunity to participate in ESPPs with untaxed income; in these cases, money is deducted from an employee's salary. Dividend Stocks. Stock Trading. Retirement Planning. Your Money.
What Companies Can You Buy Stock Directly From?
You may be the sort of person who likes to cut out the middleman in any transaction and so you're asking if you can get stock in a company without going through a broker. Many publicly traded companies offer direct stock purchase plans. A DSPP is an investment account you use to buy stock directly from the company. DSPPs have some real advantages for small investors. They have some disadvantages as well, so you need to think things through before jumping into this form of investing.
