As a Canadian, in order to build up US funds, I have held cross-listed Canadian companies on the US stock exchange to earn dividends in US dollars. When the currency exchange is not on par, that’s one way to generate cash in US dollars. Most so when the dividend paid is already declared in US dollars.
The process of transferring a share across stock exchange is called ‘journaling’. It is a term used with the discount brokers for moving cross-listed stocks between exchanges. The end result is that you can hold Canadian blue chip companies in US currencies generating US dividends. I had many readers asking me the question on how to do this as it is a way to get around currency fees to some extent.
Before you look into the process, make sure your discount broker supports it and that you have a proper US cash account. Many discount brokers already support it such as RBC Direct Investing or TD WebBroker.
Related: Norbert Gambit with DLR and DLR.U
Cross Listed Stocks
First, you need a company that trades on both exchanges. Most of the Canadian Blue Chip stocks are present on both the TSX and the NYSE. When you think about it, a share of Royal Bank on the TSX is the same as a share on the NYSE from the perspective of owning a piece of the company. Keep in mind that income taxes have different rules based on country of residence and the provenance of the dividends.
Related: Dividends Taxes
Benefits of Cross-Listed Stocks
One main benefit is that you can choose to earn the dividends in either currency. As it stands, my RRSP account for my dividend portfolio is mostly in US currency. The main reason is that there is no dividend withholding tax for foreign dividends (excluding MLPs) in an RRSP.
A note on investing in US Companies:
- The US is a large market with many large conglomerates providing international exposure.
- Exposure to new sectors with little representation in Canada.
A secondary benefit is that you incur no currency exchange fees in the process for companies that pay in USD such as Brookfield Asset Management or Thompson Reuters. Below is a comprehensive list of stocks you can use. To execute a straight currency exchange, I simply use DLR and DLR.U as it has very little fee.
| TickerKey | Ticker | Company | Sector | Industry | Score | Quote | Market Cap | P/E | FPE | EPS | Yield Raw | Yield | PayoutRatio | Payments | Dividend | Chowder | GrowthRating | IncomeRating | Tollbooth | Ambassador | Achiever | Aristocrat | King | Country | Graph |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| TSE:BAM.A | BAM.A | Brookfield Asset Management | Financial Services | Asset Management | 0.38 | 57.07 | 68.56 | 0.00 | 0.00 | -0.23 | 0.0114 | 1.14 | 1.0000 | 4 | 0.52 | 0.0755 | 6 | 4 | Tollbooth - Unregulated | NO | NO | YES | NO | Canada | 1 |
| TSE:TRI | TRI | Thompson Reuters | Industrials | Consulting Services | 0.40 | 114.05 | 45.29 | 39.42 | 39.42 | 2.89 | 0.0178 | 1.78 | 0.7023 | 4 | 1.62 | 0.0354 | 3 | 6 | Intermediate | NO | YES | YES | NO | Canada | 1 |
| TSE:NTR | NTR | Nutrien Ltd | Basic Materials | Agricultural Inputs | 0.38 | 68.75 | 39.20 | 67.93 | 67.93 | 1.01 | 0.0335 | 3.35 | 2.2826 | 4 | 1.84 | 0.0335 | 3 | 3 | Intermediate | NO | NO | NO | NO | Canada | 1 |
| TSE:ABX | ABX | Barrick Gold | Basic Materials | Gold | 0.43 | 26.57 | 37.12 | 16.18 | 16.18 | 1.64 | 0.0170 | 1.70 | 0.2750 | 4 | 0.36 | 0.0170 | 1 | 5 | Intermediate | NO | NO | NO | NO | Canada | 1 |
| TSE:FNV | FNV | Franco-Nevada Corp | Basic Materials | Gold | 0.44 | 169.27 | 32.21 | 78.77 | 78.77 | 2.15 | 0.0077 | 0.77 | 0.6061 | 4 | 1.04 | 0.0517 | 5 | 6 | Intermediate | YES | YES | YES | NO | Canada | 1 |
| TSE:QSR | QSR | Restaurant Brands International Inc. | Consumer Cyclical | Restaurants | 0.58 | 83.69 | 31.40 | 41.45 | 41.45 | 2.02 | 0.0317 | 3.17 | 1.3150 | 4 | 2.12 | 0.6522 | 8 | 4 | Consumable - Discretionary | NO | NO | YES | NO | Canada | 1 |
| TSE:WCN | WCN | Waste Connections Inc | Industrials | Waste Management | 0.45 | 143.50 | 30.05 | 147.17 | 147.17 | 0.98 | 0.0072 | 0.72 | 1.0484 | 4 | 0.82 | 0.1688 | 8 | 4 | Tollbooth - Unregulated | NO | NO | NO | NO | Canada | 1 |
| TSE:MG | MG | Magna International Inc | Consumer Cyclical | Auto Parts | 0.43 | 112.00 | 26.78 | 35.38 | 35.38 | 3.17 | 0.0192 | 1.92 | 0.6798 | 4 | 1.72 | 0.1162 | 4 | 2 | Durable | NO | NO | YES | NO | Canada | 1 |
| TSE:BIP.UN | BIP.UN | Brookfield Infrastructure Partners | Utilities | Utilities - Diversified | 0.61 | 68.63 | 22.85 | 85.68 | 85.68 | 0.80 | 0.0372 | 3.72 | 3.1950 | 4 | 2.04 | 0.1293 | 8 | 6 | Tollbooth - Regulated | YES | YES | NO | NO | Canada | 1 |
| TSE:WPM | WPM | Wheaton Precious Metals Corp | Basic Materials | Gold | 0.40 | 52.64 | 18.89 | 37.14 | 37.14 | 1.42 | 0.0124 | 1.24 | 0.4588 | 4 | 0.52 | 0.0796 | 3 | 3 | Intermediate | NO | NO | YES | NO | Canada | 1 |
| TSE:BPY.UN | BPY.UN | Brookfield Property Partners | Real Estate | Real Estate Services | 0.65 | 22.38 | 16.72 | 11.54 | 11.54 | 1.94 | 0.0745 | 7.45 | 0.8590 | 4 | 1.33 | 0.1308 | 6 | 7 | Tollbooth - Unregulated | NO | NO | NO | NO | Canada | 1 |
| TSE:BEP.UN | BEP.UN | Brookfield Renewable Partners L.P. | Utilities | Utilities - Renewable | 0.35 | 54.53 | 14.93 | 0.00 | 0.00 | -0.84 | 0.0279 | 2.79 | 1.0000 | 4 | 1.22 | 0.0572 | 2 | 4 | Tollbooth - Unregulated | NO | NO | NO | NO | Canada | 1 |
| TSE:AEM | AEM | Agnico Eagle Mines | Basic Materials | Gold | 0.56 | 76.13 | 14.83 | 28.79 | 28.79 | 2.64 | 0.0230 | 2.30 | 0.6644 | 4 | 1.40 | 0.1374 | 5 | 4 | Intermediate | NO | NO | YES | NO | Canada | 1 |
| TSE:OTEX | OTEX | Open Text Corporation | Technology | Software - Application | 0.43 | 61.87 | 13.48 | 148.87 | 148.87 | 0.42 | 0.0163 | 1.63 | 2.3961 | 4 | 0.80 | 0.1191 | 6 | 2 | Subscription | NO | NO | YES | NO | Canada | 1 |
| TSE:AQN | AQN | Algonquin Power & Utilitties Corp | Utilities | Utilities - Renewable | 0.74 | 20.58 | 12.29 | 11.84 | 11.84 | 1.74 | 0.0378 | 3.78 | 0.4467 | 4 | 0.62 | 0.1245 | 7 | 8 | Tollbooth - Unregulated | NO | NO | YES | NO | Canada | 1 |
| TSE:PAAS | PAAS | Pan American Silver Corp | Basic Materials | Silver | 0.34 | 42.00 | 7.05 | 39.53 | 39.53 | 1.06 | 0.0084 | 0.84 | 0.3310 | 4 | 0.28 | 0.0084 | 2 | 3 | Intermediate | NO | NO | NO | NO | Canada | 1 |
| TSE:RBA | RBA | Ritchie Bros Auctioneers Inc | Industrials | Specialty Business Services | 0.54 | 78.22 | 6.86 | 38.62 | 38.62 | 2.03 | 0.0141 | 1.41 | 0.5432 | 4 | 0.88 | 0.0622 | 6 | 6 | Intermediate | NO | YES | YES | NO | Canada | 1 |
| TSE:GIL | GIL | Gildan Activewear Inc. | Consumer Cyclical | Apparel Manufacturing | 0.12 | 41.63 | 6.60 | 0.00 | 0.00 | -1.43 | 0.0000 | 0.00 | 0.0000 | 4 | 0.00 | 0.2099 | 3 | 0 | Consumable - Discretionary | NO | NO | NO | NO | Canada | 1 |
| TSE:OVV | OVV | Ovintiv | Energy | Oil & Gas E & P | 0.29 | 29.90 | 6.20 | 0.00 | 0.00 | -29.48 | 0.0157 | 1.57 | 1.0000 | 4 | 0.38 | 0.0157 | 1 | 3 | Intermediate | NO | NO | NO | NO | Canada | 1 |
| TSE:MX | MX | Methanex Corp | Basic Materials | Chemicals | 0.33 | 49.86 | 3.03 | 34.81 | 34.81 | 1.43 | 0.0038 | 0.38 | 0.1332 | 4 | 0.15 | 0.0860 | 2 | 3 | Intermediate | NO | NO | NO | NO | Canada | 1 |
| TSE:MAXR | MAXR | Maxar Technologies | Technology | Communication Equipment | 0.31 | 48.19 | 2.76 | 14.95 | 14.95 | 3.22 | 0.0010 | 0.10 | 0.0156 | 4 | 0.04 | 0.0010 | 1 | 3 | Intermediate | NO | NO | NO | NO | Canada | 1 |
| TSE:UFS | UFS | Domtar Corp | Basic Materials | Paper & Paper Products | 0.06 | 46.98 | 1.88 | 0.00 | 0.00 | -3.29 | 0.0000 | 0.00 | 0.0000 | 4 | 0.00 | 0.0343 | 1 | 0 | Intermediate | NO | NO | NO | NO | Canada | 1 |
The process to buy on the TSX and have your share transferred over to the NYSE (and vice-versa) is called ‘journalling’ your shares to the other exchange. Once your transaction has settled, which takes 3 days typically, you can ask your discount broker to do that. With RBC Direct Investing it is free and they adjust the book value as well for accounting. There may be a fee with other discount brokers and you should inquire.
Discount Broker Requirements
As a note of caution, to effectively manage US stocks in your portfolio, you need dual currency accounts. Make sure your discount broker provides those (and with no fees if possible). Otherwise, you lose a lot of the benefits that come with holding the US investments.
Related: Discount Broker Review
Canadian Cross-Listed Stocks
Below is a list of all the stocks on the Canadian Dividend Performance List that also trade on the NYSE sorted by market capitalization. A large part of my portfolio is invested in US companies and is therefore in US dollars for the simple reason that the US is a much bigger economy than Canada.
The previous table above represents the subset of cross-listed stocks paying in USD whereas the following table represent the stocks that trade on both exchanges.