The Direct Stock Plan operates differently than buying stock through a broker. There is no commission charged for these stock plans, but there can be a small fee. The other difference is that the company buys and sells the stock at a given time. The investor cannot sell or trade stocks at will. The investor may turn the stocks over to a broker to sell, but the broker cannot charge a commission. You may be charged a fee by the company.
It depends on your agreement. One advantage of a company that allows a private investor to purchase stocks directly this would allow you to set up a pay check withdrawal each pay period for the purposes of the stock plan. There are various advisory services that can assist you in locating companies that offer this direct stock purchase plan. I would suggest that you find companies you are interested in a make an inquiry with investor relations.
It will astound you the number of very good companies that will allow you to buy stocks direct by setting up a plan. The ranges of possibilities include; utility companies, fast food stocks, entertainment and retail stocks. Utility investments Some utility companies employ a combination of energy producing resources. Some rely on coal, hydro electrical plants and the occasional nuclear plant.
Many rely on their natural gas reserves and electricity contracts with their producers to provide power to their customers. In effect the utility is a reseller of power sources. One example of a good utility stock is American Electric Power Company.
It trades on the NYSE under the stock ticker AEP. This is a public utility holding company that transmits, generates and distributes power to a variety of utility companies. Some of these utility companies are cooperatives, municipal power companies and smaller utility companies. There are some very good diversified utility companies that are consistent performers. Wisconsin Power & Electric trades on the NYSE as WEP. This company is a consistent performer and recently provide a large credit to its customers.
It has a 5.9 billion market capitalization. The company is owned by some of the biggest funds in the country. It sells for $44 and has a mean target of $50.
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