DRIP Break Point
The DRIP Break Point is the specific share price at which a DRIP becomes unsustainable — the exact dollar threshold where your dividend income per cycle can no longer purchase even one full share for reinvestment. Once the share price crosses this point, DRIP reinvestment stops entirely and dividends begin accumulating as cash. The Break Point is a fixed calculation based on your share count, dividend per share, and current reinvestment terms.
How Prospyr uses it
The DRIP Engine Simulator calculates your DRIP Break Point automatically and displays it alongside your current share price — so you can see exactly how much headroom you have before reinvestment stops. The simulator also models how Price Creep erodes this headroom over time, projecting the number of cycles before the Break Point is breached at your current share price growth rate. In Phase 2, the Price Creep Alert System will monitor Break Points across all holdings and send a targeted alert — specifying the exact number of shares needed to push the Break Point higher — before reinvestment is at risk.
Why this matters for Canadian investors
The DRIP Break Point carries more weight for Canadian investors than most realize. The majority of Canadian discount brokers — including Questrade and Wealthsimple — do not support fractional DRIP reinvestment. In the US, partial shares ensure the DRIP never fully stops: a $47 dividend still buys a fraction of a $150 share. In Canada, that $47 buys nothing. The Break Point is binary: above it, you compound. Below it, you stop.