In this article, we will take a look at the 14 Cheap DRIP Stocks to Buy Now.
One of the most effective ways investors grow their portfolios is through compounding returns. When dividends are reinvested instead of taken as cash, the portfolio begins to build on itself. Over time, that steady reinvestment can lead to faster growth as returns start generating their own returns.
A common way to apply this is through a dividend reinvestment plan, or DRIP. These plans automatically use dividends and capital gains distributions to buy additional shares of the same stock, often without extra cost. Over time, the effect can build gradually. Each reinvestment adds a little more, and that added amount keeps working in the background. It does not require much effort, but the impact can become meaningful as the years pass.
CNBC reported that dividend reinvestment is a strategy used by Thomas Van Spankeren, CFP and chief investment officer at Chicago-based RISE Investments, particularly for younger clients and those with longer time horizons. He said, “We like to reinvest the dividends if there is no near-term cash flow need.”
He also pointed out that enrolling in a DRIP through a brokerage can remove much of the guesswork. The process becomes automatic. These programs work in a way that is similar to dollar-cost averaging, since shares are purchased at different times regardless of price movements. At the same time, maintaining liquidity remains important. In more volatile markets, having cash available can help investors avoid selling at unfavorable times. It also gives them the flexibility to buy when valuations become more attractive.
Given this, we will take a look at some of the best DRIP stocks to own.
Photo by Dan Dennis on Unsplash
Our Methodology:
For this list, we started by using stock screeners to find dividend stocks with P/E ratios below 25, as of March 31. From that list, we picked companies that offer dividend reinvestment plans to shareholders. We limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
14. S&P Global Inc. (NYSE:SPGI)
Forward P/E: 24.6
On March 31, S&P Global Inc. (NYSE:SPGI) announced that Firdaus Bhathena will join the company as Executive Vice President and Chief Technology and Transformation Officer, with the appointment taking effect on April 27, 2026. He is expected to take charge of a unified technology organization across the business. The role centers on pushing the company’s adoption of newer technologies and helping steer its next phase of transformation.
Mr. Bhathena will report directly to Martina Cheung, President and Chief Executive Officer, and will be part of the executive leadership team. He will be based in New York. He joins from FIS Global, where he served as Executive Vice President and Global Chief Technology Officer. In that role, he focused on overhauling the company’s technology infrastructure, while also overseeing software development and its data and AI efforts. He led a global team of more than 24,000 employees.
His background spans financial services, digital health, and enterprise SaaS. Much of his experience comes from working through large-scale transformation efforts and modernizing technology platforms.
S&P Global Inc. (NYSE:SPGI) provides essential intelligence through five businesses: S&P Global Market Intelligence, S&P Global Ratings, S&P Global Commodity Insights, S&P Global Mobility, and S&P Dow Jones Indices.
13. Automatic Data Processing, Inc. (NASDAQ:ADP)
Forward P/E: 24.5
On March 31, TD Cowen lowered its price recommendation on Automatic Data Processing, Inc. (NASDAQ:ADP) to $208 from $255. It reiterated a Hold rating on the stock. The firm said it had updated its model to reflect changes in Fed Funds rate expectations, foreign exchange, and its positioning ahead of Q3 results.
A few days earlier, on March 27, Wells Fargo also reduced its price goal on ADP to $214 from $262 while keeping an Underweight rating. The firm pointed to compression in comparable group multiples as the reason for the adjustment.
During the Q2 2026 earnings call, Chief Financial Officer Peter Hadley said the company was raising its fiscal 2026 consolidated revenue outlook to about 6% growth. He added that the adjusted EBIT margin expansion forecast remained unchanged at 50 to 70 basis points. He also said the company was increasing its adjusted EPS growth outlook to between 9% and 10%, noting that share repurchases would help support that growth.
Hadley noted that the Employer Services segment is now expected to deliver around 6% revenue growth for the full year. For the PEO segment, he said revenue growth is still expected to fall in the 5% to 7% range. Excluding zero-margin pass-throughs, PEO revenue is projected to grow between 3% and 5%. He also said the effective tax rate is expected to be around 23% for the year. Hadley reiterated that the company is maintaining its guidance for new business bookings growth at 4% to 7% for fiscal 2026.
Automatic Data Processing, Inc. (NASDAQ:ADP) provides cloud-based human capital management solutions and operates through two segments: Employer Services and Professional Employer Organization.
