The benefits of Cross-Listed Stocks

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.

TickerKeyTickerCompanySectorIndustryScoreQuoteMarket CapP/EFPEEPSYield RawYieldPayoutRatioPaymentsDividendChowderGrowthRatingIncomeRatingTollboothAmbassadorAchieverAristocratKingCountryGraph
TSE:BAM.ABAM.ABrookfield Asset ManagementFinancial ServicesAsset Management0.3857.0768.560.000.00-0.230.01141.141.000040.520.075564Tollbooth - UnregulatedNONOYESNOCanada1
TSE:TRITRIThompson ReutersIndustrialsConsulting Services0.40114.0545.2939.4239.422.890.01781.780.702341.620.035436IntermediateNOYESYESNOCanada1
TSE:NTRNTRNutrien LtdBasic MaterialsAgricultural Inputs0.3868.7539.2067.9367.931.010.03353.352.282641.840.033533IntermediateNONONONOCanada1
TSE:ABXABXBarrick GoldBasic MaterialsGold0.4326.5737.1216.1816.181.640.01701.700.275040.360.017015IntermediateNONONONOCanada1
TSE:FNVFNVFranco-Nevada CorpBasic MaterialsGold0.44169.2732.2178.7778.772.150.00770.770.606141.040.051756IntermediateYESYESYESNOCanada1
TSE:QSRQSRRestaurant Brands International Inc.Consumer CyclicalRestaurants0.5883.6931.4041.4541.452.020.03173.171.315042.120.652284Consumable - DiscretionaryNONOYESNOCanada1
TSE:WCNWCNWaste Connections IncIndustrialsWaste Management0.45143.5030.05147.17147.170.980.00720.721.048440.820.168884Tollbooth - UnregulatedNONONONOCanada1
TSE:MGMGMagna International IncConsumer CyclicalAuto Parts0.43112.0026.7835.3835.383.170.01921.920.679841.720.116242DurableNONOYESNOCanada1
TSE:BIP.UNBIP.UNBrookfield Infrastructure PartnersUtilitiesUtilities - Diversified0.6168.6322.8585.6885.680.800.03723.723.195042.040.129386Tollbooth - RegulatedYESYESNONOCanada1
TSE:WPMWPMWheaton Precious Metals CorpBasic MaterialsGold0.4052.6418.8937.1437.141.420.01241.240.458840.520.079633IntermediateNONOYESNOCanada1
TSE:BPY.UNBPY.UNBrookfield Property PartnersReal EstateReal Estate Services0.6522.3816.7211.5411.541.940.07457.450.859041.330.130867Tollbooth - UnregulatedNONONONOCanada1
TSE:BEP.UNBEP.UNBrookfield Renewable Partners L.P.UtilitiesUtilities - Renewable0.3554.5314.930.000.00-0.840.02792.791.000041.220.057224Tollbooth - UnregulatedNONONONOCanada1
TSE:AEMAEMAgnico Eagle MinesBasic MaterialsGold0.5676.1314.8328.7928.792.640.02302.300.664441.400.137454IntermediateNONOYESNOCanada1
TSE:OTEXOTEXOpen Text CorporationTechnologySoftware - Application0.4361.8713.48148.87148.870.420.01631.632.396140.800.119162SubscriptionNONOYESNOCanada1
TSE:AQNAQNAlgonquin Power & Utilitties CorpUtilitiesUtilities - Renewable0.7420.5812.2911.8411.841.740.03783.780.446740.620.124578Tollbooth - UnregulatedNONOYESNOCanada1
TSE:PAASPAASPan American Silver CorpBasic MaterialsSilver0.3442.007.0539.5339.531.060.00840.840.331040.280.008423IntermediateNONONONOCanada1
TSE:RBARBARitchie Bros Auctioneers IncIndustrialsSpecialty Business Services0.5478.226.8638.6238.622.030.01411.410.543240.880.062266IntermediateNOYESYESNOCanada1
TSE:GILGILGildan Activewear Inc.Consumer CyclicalApparel Manufacturing0.1241.636.600.000.00-1.430.00000.000.000040.000.209930Consumable - DiscretionaryNONONONOCanada1
TSE:OVVOVVOvintivEnergyOil & Gas E & P0.2929.906.200.000.00-29.480.01571.571.000040.380.015713IntermediateNONONONOCanada1
TSE:MXMXMethanex CorpBasic MaterialsChemicals0.3349.863.0334.8134.811.430.00380.380.133240.150.086023IntermediateNONONONOCanada1
TSE:MAXRMAXRMaxar TechnologiesTechnologyCommunication Equipment0.3148.192.7614.9514.953.220.00100.100.015640.040.001013IntermediateNONONONOCanada1
TSE:UFSUFSDomtar CorpBasic MaterialsPaper & Paper Products0.0646.981.880.000.00-3.290.00000.000.000040.000.034310IntermediateNONONONOCanada1

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.

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DISCLOSURE: Please note that I may have a position in one or many of the holdings listed. For a complete list of my holdings, please see my Dividend Portfolio.

DISCLAIMER: Please note that this blog post represents my opinion and not an advice/recommendation. I am not a financial adviser, I am not qualified to give financial advice. Before you buy any stocks/funds consult with a qualified financial planner. Make your investment decisions at your own risk – see my full disclaimer for more details.