Price Creep
Price Creep is the gradual erosion of DRIP sustainability caused by rising share prices. As a stock’s price increases over time, the dividend payout per share stays the same — which means each dividend payment buys fewer and fewer shares. Eventually the dividend no longer covers the cost of one full share per cycle, and the DRIP breaks. Price Creep is silent, slow, and one of the most overlooked risks for long-term DRIP investors.
How Prospyr uses it
The DRIP Engine Simulator tracks Price Creep by projecting your share price forward and calculating the point at which your current dividend income can no longer purchase a full share. This output — the DRIP Break Point — tells you exactly how far your share price can rise before reinvestment stops. In Phase 2, the Price Creep Alert System will monitor this risk across your entire portfolio and send a targeted alert when a holding approaches its break point — specifying exactly how many shares you need to add to restore your DRIP Buffer.
Why this matters for Canadian investors
Price Creep risk is higher for Canadian investors because most Canadian discount brokers do not offer fractional DRIP shares. In the US, many platforms reinvest dividends into fractional shares automatically, which means the DRIP never truly breaks. In Canada, the dividend must cover the full share price. A stock that has doubled over five years while holding its dividend constant has silently put your DRIP at risk — and most investors do not discover this until reinvestment stops appearing on their statement.