Buying stock directly from companies
If you felt burned by the stock market following the financial crash of , you are not alone. The financial crash of left many wary of investing in the stock market and working with stockbrokers. In recent years, however, the investment landscape has undergone a transformation. Between the internet and numerous investment apps, it is possible to purchase stocks directly online without a broker.
I Want To Buy Shares In An Individual Company. What Do I Do?
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.
DSPPs are a simple idea, really. An investor opens an account with a company through a transfer agent and deposits funds in the account.
Ownership of shares is then transferred to the investor. For many people, low minimum investments mean they can begin building a portfolio of high-quality stocks on a limited budget. Equally important, the transfer agent charges much less than a traditional broker. In some cases the company whose stock you are buying pays some or all of the fees so your money goes to purchase shares.
Transactions cost a dollar or two as long as you use electronic funds transfer from a checking or savings account, plus cents per share. However, there are some companies like Exxon Mobil who pay these charges for you. Companies offer added features to make their plans more attractive. Some will keep your stock certificates in safekeeping and allow you to transfer ownership at no charge. In most plans you can chose to have part or all of your dividends reinvested at no charge.
If you already have a particular company in mind as a possible investment, you can find out if they have a direct stock purchase plan by going to the company's Investor Relations website. Check the listings of financial companies that specialize in DSPPs. The two largest are Computershare, Inc. Based in Atlanta, Georgia, William Adkins has been writing professionally since He writes about small business, finance and economics issues for publishers like Chron Small Business and Bizfluent.
Adkins holds master's degrees in history of business and labor and in sociology from Georgia State University. He became a member of the Society of Professional Journalists in Share It.
TL;DR Too Long; Didn't Read The types of companies you can buy stock directly from include big box stores, businesses in the restaurant industry and even some large manufacturers. About the Author.
Direct Stock Purchase Plan. This is when a person buys stock directly from the issuing company. Several well-known companies will sell stock. To buy a stock, you'll want to evaluate the company as an investment, decide how You can buy stocks online, through a stockbroker or directly from certain.
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.
With the ease of online investing, buying shares of a company has become a relatively simple way to build a nest egg or start a retirement fund.
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.
Advantages & Disadvantages of Stocks Directly From the Company vs. a Broker
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?
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.
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Direct Investment Plans: Buying Stock Directly from the Company
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. Basically, a DSPP is an investment account dedicated to the stock of a single corporation. When you buy stock from a broker, shares are typically registered to the brokerage firm and credited to your account. According to Bankrate. When you consider opening a DSPP with a company, read the plan brochure or prospectus carefully. There is sometimes a one-time set-up fee and the charges for selling shares are usually higher. If this describes you, DSPPs just might be your cup of tea.
How to Buy Stocks Online Without a Broker – Direct Stock Purchase Plans
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. DSPPs are a simple idea, really. An investor opens an account with a company through a transfer agent and deposits funds in the account. Ownership of shares is then transferred to the investor. For many people, low minimum investments mean they can begin building a portfolio of high-quality stocks on a limited budget.
