Just curious, when do you guys usually opt for script dividends? - Seedly
 

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Asked by Kh

Asked on 24 Nov 2019

Just curious, when do you guys usually opt for script dividends?

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LK
Lee Kong Heng, Biotechnologist at RSTO Pte Ltd
Level 4. Prodigy
Answered on 24 Nov 2019

It is a cost effective way increase share holdings over time, but not all companies have that option. Some ETF like IWDA reinvest their dividends, if i understand correctly.

I chose to receive dividends as I did not want to deal with odd lots. On hindsight, I'm not deeply familiar with the companies business model nor confident with high certainty on its growth in value over time while i was holding the shares. Made the mistake of chasing high yield dividend stocks.

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I used to do it more when it was easy to automate (some companies have dividiend reinvestment program with small discount to average price). After setting up I didn't really need to think anymore.

Now not so much coz the shares I have require an election each time and I am too lazy so just get default option which is the cash dividend.

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