Tim Beyers at Fool.com reminds us that automatic dividend investment is applicable to stock positions too:

Brokers are generally very helpful when it comes to reinvesting dividends. Most often, you'll simply choose an option online to have the dividends from the stocks you own reinvested. Better still, the service is often free. Here's a short rundown of what I learned in a recent survey of popular brokerages.

Originally I held the belief that I can only reinvest dividends from my mutual fund holdings, but Tim reported that Charles Schwab, E*Trade, Fidelity and TD Ameritrade all offer such services. An email exchange to Fidelity rep confirmed that Fidelity is offering this for free:

At Fidelity, we do not charge a commission to reinvest your dividends. If you elect for dividend reinvestments, your dividends will only reinvest if the company allows for reinvestments. Some companies may choose for their dividends to pay to cash only and that will override your choice for reinvesting.

I'm holding on a number of high yielding stocks Bank of America (BAC), Citigroup (C), Altria (MO) and Pfizer (PFE), so without any hesitation, I enabled automatic dividend investment for all these positions. As Tim correctly observed, "when it comes to stocks and investing, found money in the form of dividends is about as good as it gets. And since the service is free at most brokerages, it's never been cheaper to cash in."