qbe bsp vs drp, page-2

300 shares = $186 in dividend = 13 to 14 shares (assuming share price averages around $14 over the next couple of weeks).

What would your wife do with $186? Perhaps buy a pair of shoes. Here today, gone tomorrow.

With QBE at current prices I'm inclined to put them in the bottom drawer, forget about them and let them accumulate with the drp. Historically and on current share price and dividend they are great value. The company is rock solid, not even a hurricane would blow it over (no pun intended) so there is every indication the share price should improve in the medium future and dividends should at least stay much the same.

Come back in three years time with dividend reinvestment (assuming same dividend payout and a modest gradual increase in SP by $2 per year to $21 - still well below historical highs) and you will have almost doubled your original investment.

What would your wife do with $4,000 in 2014? Perhaps she would take you away for a tropical holiday flying Qantas and help boost my modest investment in that company!

Anyway, that's my thoughts. It's what I'm doing with a similar holding in QBE. Remember though, nothing is ever guaranteed in the Stock Market so always do your own research.