Broken
Broken is the fourth tier in Prospyr’s Coverage Ratio System, assigned when a holding’s ratio falls below 1.00. At Broken, the dividend income generated per cycle is no longer sufficient to purchase even one full share for reinvestment. The DRIP has stopped. Dividends are accumulating as cash rather than compounding as shares. Broken status requires immediate action: add shares to restore coverage, or accept that the compounding engine has stopped.
How Prospyr uses it
Broken is a status within the Coverage Ratio System, coming in Phase 2. In Phase 2, Broken holdings will appear in red on the portfolio dashboard — the most urgent visual signal in the system. The alert will specify the exact number of shares needed to restore the holding to At Risk or above, along with the approximate cost at current prices. You can identify whether a single holding is at Broken status today using the DRIP Engine Simulator, which outputs your DRIP Break Point and current coverage level.
Why this matters for Canadian investors
A Broken DRIP is binary for Canadian investors: reinvestment has stopped entirely. Unlike US platforms that continue reinvesting fractional shares even below the theoretical break point, Canadian brokers require the full share purchase threshold to be met each cycle. A Broken holding is not partially broken — it is off. Every cycle that passes without reinvestment is compounding that does not happen. Restoring coverage before the next dividend date is almost always the right move.