20 Years In The Chevron DRIP

Chevron Drip logo

For my birthday in 1995, my uncle gifted me one share of Chevron (CVX) stock out of his dividend reinvestment plan (DRIP). He was an employee at the time. He instructed me to regularly invest small amounts of money into the program and automatically reinvest the dividends I received. Eventually, he said, the quarterly dividend would be large enough to buy whole new shares every quarter, compounding into a larger holding over time. Chevron was the first stock I ever owned.

Today with online access to DRIPs and no-cost brokers like Loyal3, novice investors can easily buy individual stocks with small amounts of cash. Back in 1995, participating in DRIPs through the mail was the only reasonable choice for young investors to start buying individual stocks. The DRIP was, and still is, a great way to learn the basics of stock investing.

As luck would have it, Chevron has been a prolific large-cap dividend growth stock over the past few decades, raising its dividend each of the last 27 years. By learning about the DRIP strategy at an early age and investing in Chevron, I became an accidental dividend growth investor, which is still my preferred stock investment strategy today.

This is an exclusive article published on Seeking Alpha. Please click here to continue reading (thanks!)…

It’s been a while since my last feature on Seeking Alpha. I decided that a 20-year milestone is an achievement that may be interesting to a broader audience. 

One of the first articles I wrote on this blog was about the Chevron DRIP and how I started dividend investing. This all-new article takes a different look at the updated numbers, shares my purchase and fee data, and includes performance and yield analysis.

Thank you for clicking over to Seeking Alpha and reading this piece that was 20 years in the making. For fellow Chevron holders, here’s to the next 20! -RBD

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17 Responses to 20 Years In The Chevron DRIP

  1. Income Surfer May 13, 2015 at 7:39 am #

    I’ve only been a Chevron shareholder for 7 years. 10 years from now I hope it works out as well as yours has. Have a great week
    -Bryan

    • Retire Before Dad May 13, 2015 at 8:26 am #

      It’s been a good seven years. I purchased the bulk of my shares in the last decade. Only wish I’d been more aggressive when I was younger. But I didn’t have the cash, an I wasn’t a DG investor entirely yet. Thanks for stopping by.
      -RBD

  2. FerdiS May 13, 2015 at 9:46 am #

    I read your article at Seeking Alpha — liked it a lot! Congratulations on getting an Editor’s pick! Isn’t it great that your uncle started you on dividend growth investing such a long time ago? What a trajectory he put you on…

    Take care and keep up the good work!

    • Retire Before Dad May 13, 2015 at 10:48 am #

      FerdiS,
      It was quite a gift I received. I hope the story inspires others to make a similar gift to a young one. Much better than a savings bond, that is for sure.

      I don’t write a lot for Seeking Alpha, so I did not know what the Editor’s pick would do. Seems it helped get the article to trend in the most popular list, which of course is very exciting for the volume of readers. Any exposure to a wider audience is always welcome.

      Thanks for the comment!
      -RBD

  3. Dividend Empire May 13, 2015 at 12:09 pm #

    I loved this story and it’s a great example of what a DRIP can do. I’m going to do this for all of the little ones in my life so hopefully they can get an early start.

    • Retire Before Dad May 13, 2015 at 1:30 pm #

      DE,
      Glad to hear this has inspired you. I was in my early twenties when I got it. That was the right time to get started for. Definitely was a great gift. Thanks.

  4. Tawcan May 13, 2015 at 12:59 pm #

    Very cool, I really enjoyed reading your article. It definitely demonstrates how powerful DRIP is.

    • Retire Before Dad May 13, 2015 at 1:33 pm #

      Thanks a lot, Tawcan. The DRIP is really another wealth building tool. My total return isn’t huge, but every quarter they continue to pay the dividend, I get wealthier. The price fluctuates a lot over time. But those big upswings in price is when the wealth grows best. 20 years from now it should really payoff. As long as they keep raising!
      -RBD

  5. Fervent Finance May 13, 2015 at 3:03 pm #

    Nice piece. I’m a big fan of DRIPs as I like to keep things simple. Don’t have to think about it, it just reinvests itself. Hope it keeps paying you a dividend and growing.

    • Retire Before Dad May 13, 2015 at 10:20 pm #

      FF,
      Yeah I like the automation. But when there’s a fee, I hate that it’s siphoning off cash every month. I pay attention more now than I used to. That’s the main reason I stopped the KO and CVX DRIPs. BAC, PG, WTR, and I think EMR are all free. Still have those and contributing to some. But tax time was getting difficult with too many DRIPs. That’s another reason I’ve cut back. Plan to keep the CVX DRIP rolling for years to come.
      -RBD

  6. DivHut May 13, 2015 at 7:51 pm #

    Great story and lesson to be learned about the power of long term dividend growth and what compounding can do. My first company I ever owned was Homestake Mining (HM), now ABX, which also paid a dividend (though I didn’t really understand why I was getting checks in the mail at the time). Still a great story. We just opened a custodial account for baby DivHut and will fill his account with dividend paying stocks exclusively. Thanks for sharing.

    • Retire Before Dad May 13, 2015 at 10:17 pm #

      DH,
      Ha ha. Why are these people sending me money!!! I guess I knew the very basics because I took an econ class in high school that went over those things. When you’re a kid, it’s kind of a surprise that not only the stock can go up, but they pay you too. Great deal!

      Never heard of HM but do know ABX.

      I haven’t done anything like that for my kids. Just doing the 529 for now. Maybe some day I’ll start something. I think money issues will be instilled in my kids head fairly early on.
      -RBD

  7. B May 14, 2015 at 3:34 am #

    Hi RBD

    Wow 20 years of drip-ing there is awesome. It goes to show that once you’ve found the right business model to invest, it’s one way traffic from here and you’ll go for the longest run ever. Good job there.

  8. Geblin May 15, 2015 at 10:54 am #

    Hi RBD,

    Well that was certainly a gift that keeps on giving. It also shows that dividend investors need to have patience ( and a lot of people seem to lack that these days).

    Cheers,
    G

  9. Get Rich Brothers May 15, 2015 at 2:28 pm #

    RBD,

    As I mentioned on your SA post, I’d love to hear your uncle’s perspective as he hopefully followed his own advice over the years!

    – Ryan from GRB

  10. Amit August 10, 2015 at 1:45 pm #

    Which firm do you use for DRIPs? I found firstshare.com and they have some no load stock DRIPS including XOM. I assume you are still a buyer of CVX with oil prices potentially decreasing to $30’s?

    • Retire Before Dad August 10, 2015 at 7:50 pm #

      Amit,
      Computershare. I usually stick to stocks with a DSPP to avoid a service like first share. Or use Loyal3 which I prefer anyways. I am buying some CVX down at these levels, although I’m probably done because it’s still one of my larger positions.
      -RBD

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