Most Canadian companies who pay a dividend do so in Canadian dollars. However, there is a good number of companies that actually pay their dividends in US dollars, close to 70 of them in fact. But what incentives do these companies have in doing so and how can investors take advantage of this anomaly? Who are these companies and what are the implications of receiving dividends in USD?
The main reason a Canadian company would pay a US dividend is simply that a significant portion of their revenues and operations are in US dollars, thus making it much easier for them to pay US dividends. Logistically this makes sense, as it would be inefficient for a company to convert USD to CAD solely for the purpose of paying dividends to shareholders.
Why earn US dividends from Canadian companies?
An obvious advantage of receiving US dividends from Canadian companies Is that It Is an easy way to earn USD without exchanging any CAD. This is a unique perk because you are buying Canadian listed companies in CAD, and receiving USD in the form of dividends. Investors can then accumulate these US dividends in the USD portion of their brokerage account and use them for reinvesting in US equities, converting to CAD when rates are favorable or even as a reserve for expenses for trips to south of the border. This strategy is especially appealing in recent times for Canadians facing the hurdle of converting their weaker CAD to the strong USD.
Ask Your Broker
It is also important to advise your discount brokerage that you wish to receive dividends from select companies in US dollars. If your broker allows this (which they normally should), they will journal over future US dividends into your USD brokerage account.
Taxes
When it comes to income however, US dollar dividends from Canadian companies are treated as Canadian dividend and not as foreign dividends. This makes sense because a US dividend does not make a Canadian company not Canadian. The CRA will simply convert the value of those US dollars into Canadian dollars for calculating your income, so this should be kept in mind when calculating your total dividend income.
Canadian Stocks That Pay US Dividends
Although we described them as an anomaly, many would be surprised at how familiar most of these companies are to us. In the list below, we can even see some 5i Research coverage companies such as, Open Text Corp. (OTEX), Magna International Inc. (MG), and Methanex Corp. (MX), which have seen a 5-year dividend growth rate of 48.84%, 15.58% and 10.95% respectively. Other names familiar to investors are Barrick Gold Corp. (ABX) Brookfield Asset Management Inc. (BAM.A) and one of our favourites, Constellation Software (CSU).
| Ticker | Company Name | Dividend Frequency | Company Market Cap (USD) |
| BAMa.TO | Brookfield Asset Management Inc | Quarterly dividend | 43,849,494,230.57 |
| NTR.TO | Nutrien Ltd | Quarterly dividend | 31,751,671,223.07 |
| QSR.TO | Restaurant Brands International Inc | Quarterly dividend | 29,186,211,838.74 |
| TRI.TO | Thomson Reuters Corp | Dividend with no set frequency | 26,811,332,934.27 |
| ABX.TO | Barrick Gold Corp | Quarterly dividend | 23,420,348,606.13 |
| WCN.TO | Waste Connections Inc | Quarterly dividend | 22,272,631,658.90 |
| MG.TO | Magna International Inc | Quarterly dividend | 17,221,230,146.52 |
| CSU.TO | Constellation Software Inc | Quarterly dividend | 16,022,639,421.74 |
| FNV.TO | Franco-Nevada Corp | Quarterly dividend | 14,321,970,509.99 |
| FFH.TO | Fairfax Financial Holdings Ltd | Annual dividend | 13,725,855,496.20 |
| QSP_u.TO | Restaurant Brands International LP | Quarterly dividend | 12,950,041,937.23 |
| AEM.TO | Agnico Eagle Mines Ltd | Quarterly dividend | 10,284,860,852.02 |
| OTEX.TO | Open Text Corp | Quarterly dividend | 10,137,165,875.50 |
| G.TO | Goldcorp Inc | Quarterly dividend | 9,714,224,158.75 |
| WPM.TO | Wheaton Precious Metals Corp | Quarterly dividend | 9,540,860,840.69 |
| BHC.TO | Bausch Health Companies Inc | Quarterly dividend | 9,022,723,338.26 |
| GIL.TO | Gildan Activewear Inc | Quarterly dividend | 7,131,378,899.37 |
| ECA.TO | Encana Corp | Quarterly dividend | 6,480,209,322.50 |
| AQN.TO | Algonquin Power & Utilities Corp | Quarterly dividend | 5,575,863,920.48 |
| MX.TO | Methanex Corp | Quarterly dividend | 4,333,461,833.48 |
Members can view a full list of Canadian companies that pay US dividends and their yields and growth rates at the bottom of the page.
Although, we do not think it should be a main criterion for determining your investment in a company, knowing that a Canadian company pays US dividends can also indicate the geographic reach it has, particularly in the United States as US dividends are often accompanied with significant USD cashflows from the business. Depending on the company/industry, a higher U.S. revenue exposure can also provide these companies with an advantage over their Canadian peers as the U.S. economy continues to outpace Canada.
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Full List of Canadian Stocks with US dividends
| Ticker | Company Name | Country of Headquarters | Original Dividend Currency | Market Cap | Dividend Yield | Dividend Growth Hist 5 YR |
| BAMa.TO | Brookfield Asset Management Inc | Canada | USD | 47,839,338,355.72 | 1.3% | 8.8% |
| NTR.TO | Nutrien Ltd | Canada | USD | 32,514,586,651.44 | 3.2% | - |
| QSR.TO | Restaurant Brands International Inc | Canada | USD | 30,368,736,219.46 | 3.0% | 49.6% |
| TRI.TO | Thomson Reuters Corp | Canada | USD | 30,139,752,711.26 | 2.4% | 1.3% |
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