A dividend reinvestment plan (DRIP) allows investors to automatically reinvest their cash dividends into additional shares of the company's stock instead of receiving the dividends as cash. This process can help investors accumulate more shares over time, potentially increasing their overall investment value. DRIPs are often offered by companies directly, allowing shareholders to purchase shares at a reduced price or without paying brokerage fees. This strategy can be beneficial for long-term investors looking to grow their investment portfolio through the power of compounding returns.