Dividend questions, answered briefly

There is no single good number. A yield is only useful next to the payout ratio, cash flow, debt and the company's own history. A yield far above a company's usual level often means the price fell because the market doubts the dividend. See yield traps.

No. The board of directors declares each dividend and can raise, cut, suspend or eliminate it. Preferred shares have contractual dividend terms, but even those can be suspended in some cases.

From the ex-date, buyers no longer receive the declared dividend, so the price is expected, all else equal, to open lower by about the dividend amount. Other news moves prices too, so the drop is rarely exact.

No. Paying a dividend moves cash from the company to you, and the company is worth correspondingly less. What matters is total return: dividends plus price change. See total return vs yield.

Divide the yearly target ($12,000) by the yield: $300,000 at 4%, $240,000 at 5%, $400,000 at 3%, before tax and assuming no cuts. The income calculator does this with your numbers.

Before the ex-dividend date. Since T+1 settlement (Canada May 27, 2024; US May 28, 2024), the ex-date is normally the record date, so the last day to buy is the business day before it. Use the ex-dividend date calculator.

Yes. If you owned the shares before the ex-date, you are the shareholder of record and receive the dividend on the payment date even if you sell on or after the ex-date.

In a taxable account, yes, in both Canada and the US, in the year they are paid. In Canada each reinvestment also adds to your adjusted cost base. See DRIPs and ACB.

Eligible dividends are grossed up by 38% and earn a federal credit of 15.0198% of the grossed-up amount; non-eligible dividends are grossed up 15% with a 9.0301% credit. Provinces add their own credits. See the dividend tax credit.

We don't make recommendations, but the rules are clear: US dividends paid to an RRSP or RRIF are generally exempt from US withholding under the treaty, while 15% is withheld in a TFSA and cannot be recovered. Compare the cost with the withholding calculator.

They can. Net income includes the grossed-up dividend (138% of eligible dividends), and the OAS recovery tax is 15% of net income above $95,323 for 2026 income (a Service Canada estimate). See dividends and the OAS clawback.

No. Foreign dividends are taxed like interest. In a non-registered account you can generally claim a foreign tax credit for the US tax withheld.

0%, 15% or 20%, depending on taxable income. For 2026 the 0% rate applies up to $49,450 (single) or $98,900 (married filing jointly) of taxable income, and the 20% rate above $545,500 (single) or $613,700 (MFJ). See qualified dividends.

It must be paid by a US corporation or a qualified foreign corporation, and you must meet the holding period: more than 60 days in the 121-day period that begins 60 days before the ex-dividend date for common shares.

Yes, above modified AGI of $200,000 (single) or $250,000 (married filing jointly). The thresholds are not indexed for inflation. See NIIT.

No. We don't publish picks, ratings, rankings, price targets or 'top' lists, and the calculators contain no company data. Every calculator works on numbers you enter. See why we don't publish top lists.

From primary sources: the CRA and provincial worksheets, Service Canada, the Department of Finance treaty text, the IRS and Rev. Proc. 2025-32, the SEC, CSA, FINRA and TMX. Each page lists its sources and the date the rules were checked. See methodology.

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