Get US Dividends From Canadian Stocks

Dividend Earner

Dividend Earner

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Getting US dividends from Canadian stocks is much simpler than you may think, even if you feel the US dollar is expensive. The strategy is simple with the correct discount broker.

Why Get US Dividends from Canadian Stocks?

As a Canadian, realizing how small our economy is is very important. While it is a good economy, it is a small one, and it is mainly focused on the financial and energy sectors. It is acceptable to be proud of it, but as an investor, you want to be objective and realize that you need exposure to other economies.

You may choose to do it through indexes, but I do it by buying US companies. One key factor in buying US companies is that you need US dollars. The currency exchange rate may seem prohibitive at times, but that doesn’t have to be the case.

There was a time when the Canadian dollar was on par and it was a good time to just buy US companies. With the currency exchange, there is a ‘value’ blocker that all Canadian investors need to get over.

In addition to exchanging currencies using your favourite method, you can earn US dividends by holding Canadian stocks on a US exchange that declares their dividends in USD.

Many large public corporations in Canada trade on the New York Stock Exchange (NYSE), allowing you to earn US dividends. Since the dividend is distributed by a Canadian company, it is also an eligible Canadian dividend, even if it’s paid in USD.

The company shares can be moved between the TSX and the NYSE through a process called journalling, so you can buy them in Canadian dollars, move the shares over to the NYSE, and then earn US dividends.

Cross-Listed Canadian Dividend Stocks

Building a cash flow in US dollars isn’t out of your reach; you can do it with your Canadian dollars. This list of companies below comes from the Dividend Stock Screener. There might be others, but I consider those the companies worth paying attention to, and some of them are the safest Canadian dividend stocks. As you can see, there are many options to earn US dividends and put it to work towards a US investment.

While all of the companies below are cross-listed stocks, not all of them are declared in US dollars. Those who pay in US dollars will provide you with the expected dividend yield when held in a US account. Holding a Canadian stock on a US exchange that pays in Canadian currency will, unfortunately, trigger a currency exchange, but you can still earn income in USD.

TIP: Once you get set up with USD shares and with the right trading platform, you can DRIP shares and let them compound.

19 US Dollar Dividend Payers

These companies will pay the expected dividend rate in US dollars. Just buy them on the Canadian side and journal them on the US account, and it will start paying US dividends. Slowly, you will build your US cash account to buy US holdings without incurring a currency exchange. Their accounting is pretty much done in USD.

27 Canadian Dollar Dividend Payers

These Canadian companies also trade on a US exchange and declare their dividend in Canadian dollars. When holding them on a US exchange, the Canadian dividend will be converted to US currency. You still can earn US dollars but you could also just earn Canadian dividend and wait to exchange once you have enough.