S&P/ASX 200 Index (ASX: XJO) companies are starting to announce their dividend reinvestment plan (DRP) share prices.
This follows a period of post-results trading during which time the companies have calculated their DRP prices based on differing methods.
DRPs allow shareholders to instruct the companies they're invested in to use their dividends to buy more stock instead of paying them cash.
Sometimes, ASX companies offer a DRP discount to encourage investors to reinvest.
For example, Evolution Mining Ltd (ASX: EVN) offered a 5% DRP discount this time around, and more than 50% of shareholders reinvested their dividends.
Each ASX company has a unique process for determining its DRP share price.
Many companies use an average aggregate share price calculated from a defined period of trading days after the dividend record date.
Then they issue the new DRP shares to investors on the same day as they pay the cash dividends out.
Other companies are different.
BHP Group Ltd (ASX: BHP), for example, buys its DRP shares in the days after the dividend payment date.
So, the DRP share price you end up getting depends heavily on each company's unique DRP policy.
Let's take a look at the DRP share prices for three of Australia's largest companies.
Invested in Telstra shares? Here's your DRP price
Telstra Group Ltd (ASX: TLS) announced a fully franked final dividend of 9.5 cents per share payable on 25 September.
The ASX 200 telco calculated its DRP share price by taking the arithmetic average of the daily volume-weighted average price of Telstra shares traded from 1 September to 5 September inclusive.
This led to a DRP share price of $4.87770, with no discount applied.
The Telstra share price closed at $4.92 on Tuesday, down 0.2% for the day.
Investors will receive their DRP Telstra shares on 25 September.
DRP price for QBE shares
QBE Insurance Group Ltd (ASX: QBE) announced a 25% franked final dividend of 31 cents per share payable on 26 September.
QBE determined its DRP share price based on the volume-weighted average price of QBE shares from 27 August to 9 September inclusive.
This led to a DRP share price of $21.37, with no discount.
The QBE share price closed at $20.62 on Tuesday, down 0.48%.
Investors will receive their DRP QBE shares on 26 September.
How about IAG shares?
Insurance Australia Group Ltd (ASX: IAG) announced a 40% franked final dividend of 19 cents per share payable tomorrow.
The insurance giant calculated its DRP share price by taking the daily volume-weighted average sale price of IAG shares sold between 27 August and 9 September.
This led to a DRP share price of $8.6743, with no discount applied.
The IAG share price closed at $8.62 yesterday, down 0.58%.
Investors will receive their DRP IAG shares on Thursday.
Further reading
Find out the DRP prices for Fortescue Ltd (ASX: FMG), Northern Star Resources Ltd (ASX: NST), and Evolution Mining here.
