33% match- good proposition for 3 years?

[jIM_Ohio]

My company is offering company stock with a 33% match if held for 3 years.

For every 3 shares I buy, they will give me one additional share in 3 years.

Good deal or not?

I am trying to come up with a way to determine how much to send to this (all contributions must be made within next 8-10 weeks).

Here is some data on the company (from the prospectus sent in the e-mail):

861 million shares outstanding. Price of stock on Nov 14 (date of price for this program) was $53.24. The math suggests the market cap is 45.8 BILLION for my employer.

Dividend in 2004 was $1.63, 2005 was $1.65, 2006 was $1.88 and 2007 was $2.36. 2008 has dividend has not been approved yet.

We normally send $500/month to Roths for each of us, I am thinking of putting the $1000 for Dec and $1000 for Jan into the stock, then starting Roth contributions in Feb.

Have any of you ever been given "one time" stock purchase offers like this? Thoughts?

[simpletron]

my company offers something similar. they give a 15% discount(~17.6% match) on company stock, must be held for a mininum of a year, max investment of 2.5% salary but the offer is given every quarter. I take full advantage of this because it is free money plus I would invest in the company without the match, just not as much, because of the good dividend, strong earnings, and is fairly recession proof(defense).

your company stock would have to do really badly for you to lose money from its probably beaten down state. if the dividend yield of ~4% doesn't change, then the stock would have be down about 50% over 3 years before you lose money. I don't know what company you work for but if you believe that the company will do well at all going forward, then I would buy as much as I could afford.

edit: you end up with 50% more shares because of the dividend. which means a drop of 33%(not 50% as i said earlier) would be break even.(66%*1.5=1) I would still buy.

[tripods68]

Are you holding more than 10% of your company's portfolio?

That should be the main deciding factor IMO.

[disneysteve]

Would you buy company stock if not for this offer? How much of your portfolio is already in company stock?

It sounds like a good deal as long as the stock is a good one with good long-term prospects.

[arthurb999]

What type of business is the company in?

[Broken Arrow]

Yes, what's the ticker if you don't mind me asking?

I think this is a very good deal, assuming the company isn't going to flop over the next 3 years, you're going to stay with them during that time, and that at the end of the 3 years there is the option to sell that position if you so choose.

[jIM_Ohio]

SI is the ticker- we are in eery business I think- energy, software, IT and probably many other things I do not know about.

I have 10 percent of my 401k into company stock.

[Investing First Steps]

The holding for 3 years is a bit of a problem. One thing to always remember when it comes to stock options or owning company stock (either in your personal accounts or retirement plans) is that your fortune is already pretty closely tied to your employer. You don't want to put yourself in a position where if the company tanks you lose your job AND all your savings. I'd always say give serious thought before investing EVEN MORE in your company than you already do by working there.

[disneysteve]

Do you have to hold for 3 years or do you just not get the match if you sell before then?

[Investing First Steps]

If I read correctly I think he just has to hold to get the match. But if you don't get the match it's certainly a different value proposition.

[jIM_Ohio]

The 2k investment being considered would be 1-2 percent of overall portfolio.

I have 10 of my 401k (4 percent of overall) in the stock now.

Need to hold 3 years to get the match, I can sell my shares whenever.

[disneysteve]

So you can sell the shares whenever and just forfeit the match and you wouldn't be overly invested in your company stock if you did this. Sounds like a worthwhile deal to me.