There are certain things in finance that seem to happen every generation. The stock market rises and falls. Coca-Cola purchases its bottlers under an increased efficiency theory, and then later spins it off on the theory that it was dragging margins. And Royal Dutch Shell shifts between encouraging its investors to elect for a scrip dividend and then cancelling its special dividend program on the theory that is no longer creates shareholder value.
If you reinvest, it is easy to think that a scrip dividend is indistinguishable from a cash dividend payout. However, this is a tribute to the efficiency of the modern brokerage houses rather than an accurate depiction of investment reality. Scrip dividends have a different effect on shareholders and the finances of an issuing company than a traditional cash dividend, and I discuss these effects below.