Reference

Dividend glossary

52 dividend terms in plain language, each linked to the guide, tax page or calculator that goes deeper.

Jargon is just shorthand. Here's the long version.

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Adjusted cost base (ACB): In Canada, your total cost of an investment for tax purposes, including purchase costs and reinvested dividends, less any return of capital. Used to calculate capital gains when you sell. More
AFFO (adjusted funds from operations): A cash-flow measure many REITs report, generally funds from operations less recurring capital spending. Often used instead of earnings as the base for a REIT payout ratio. Definitions vary by issuer. More
Annual dividend: The total dividends per share paid (trailing) or expected (forward) over a year. Forward annual dividend = latest regular payment × payments per year.
Board of directors: The group that declares each dividend. A dividend is not owed until declared, and the board can raise, cut, suspend or eliminate it. More
Buyback (share repurchase): A company buying its own shares, returning cash to shareholders who sell and reducing the share count for those who stay. More
Capital gain: The profit when you sell an investment for more than its cost (ACB in Canada, basis in the US). Taxed differently from dividends. More
CCPC: Canadian-controlled private corporation. The type of corporation, and the rate at which its income was taxed, affect whether its dividends can be designated eligible. More
Coverage ratio: Earnings (or cash flow) per share divided by dividends per share. The inverse of the payout ratio: 2× coverage equals a 50% payout. More
Cumulative preferred share: A preferred share whose missed dividends accumulate and must be paid before common shareholders receive any dividend. More
Declaration date: The day the board announces a dividend, with its amount, record date and payment date. More
Dividend: A distribution of a company's profits or cash to shareholders, usually in cash, declared by the board. More
Dividend aristocrat (general term): An informal label for companies that have raised dividends for many consecutive years. Index providers define their own lists and rules; a long record is history, not a guarantee.
Dividend cut: A reduction in the dividend per share. Often follows falling earnings, rising debt or a payout ratio that has stayed too high. More
Dividend growth rate: How fast the dividend per share has grown, usually expressed as a compound annual growth rate (CAGR) over several years. More
Dividend reinvestment plan (DRIP): A plan that uses your dividends to buy more shares automatically, through the company (company DRIP) or your broker (synthetic DRIP). More
Dividend tax credit (DTC): Canadian federal and provincial credits that reduce tax on grossed-up dividends from Canadian corporations. Non-refundable. More
Dividend yield: Annual dividend per share divided by the share price. Moves every time the price moves. More
Eligible dividend: A dividend from a Canadian corporation designated as eligible, grossed up by 38% with a federal dividend tax credit of 15.0198% of the grossed-up amount (rates checked October 31, 2026). More
EPS (earnings per share): Net income attributable to common shareholders divided by shares outstanding. Reported (GAAP or IFRS) and company-adjusted versions can differ.
Ex-dividend date: The first day a share trades without the right to the declared dividend. Under T+1 settlement it is normally the record date. More
FFO (funds from operations): A REIT measure that adds depreciation back to earnings and adjusts for property sales. AFFO goes further by subtracting recurring capital spending. More
Foreign tax credit: A credit that can reduce Canadian (or US) tax for foreign tax withheld on income reported on your return, such as US withholding on US dividends in a Canadian non-registered account. More
Forward yield: Yield calculated from the latest declared regular dividend annualized, divided by today's price.
Free cash flow (FCF): Operating cash flow minus capital expenditures. The cash a business has left to pay dividends, reduce debt or buy back shares. More
Gross-up: In Canada, the amount added to actual dividends to approximate pre-tax corporate income: 38% for eligible dividends, 15% for non-eligible dividends (rates checked October 31, 2026). More
Herfindahl index (HHI): The sum of squared portfolio weights. Its inverse is the effective number of holdings: how many equal-sized positions would give the same concentration. More
Holding period (US): To be qualified, common-share dividends generally require holding the shares more than 60 days during the 121-day period that begins 60 days before the ex-dividend date. More
Income trust: A Canadian trust structure that distributes most of its cash flow to unitholders. Distributions can include income, capital gains and return of capital. More
Net investment income tax (NIIT): A 3.8% US federal tax on the lesser of net investment income or modified AGI above $200,000 (single) or $250,000 (married filing jointly). Not indexed. More
Non-eligible dividend: A dividend from a Canadian corporation not designated eligible (often from small-business income taxed at a lower corporate rate). Grossed up by 15% with a 9.0301% federal credit. More
Non-refundable credit: A credit that can reduce tax to zero but not below it. Canada's dividend tax credits are non-refundable. More
OAS recovery tax: Repayment of Old Age Security at 15% of net income above a threshold ($95,323 for 2026 income, a Service Canada estimate). Grossed-up dividends count in net income. More
Payment date: The day the dividend is actually paid to shareholders of record. More
Payout ratio: Dividends divided by earnings (or by free cash flow, or AFFO for REITs). Shows how much of what the business generates goes out as dividends. More
Preferred share: A share class with priority over common shares for dividends and in liquidation, usually with a fixed or reset dividend and no growth. More
Qualified dividend: A US dividend taxed at 0%, 15% or 20% rather than ordinary rates, if paid by a US or qualified foreign corporation and the holding-period rule is met. More
Rate-reset preferred share: A preferred share whose dividend rate resets periodically (often every five years) to a benchmark yield plus a fixed spread. More
Record date: The date on which you must be on the company's books as a shareholder to receive the dividend. More
REIT: Real estate investment trust: an entity that owns income-producing property and distributes much of its cash flow. More
Return of capital (ROC): A distribution that returns part of your own investment rather than income. In Canada it generally reduces your ACB rather than being taxed when received. More
RRSP / RRIF: Canadian registered retirement plans. US dividends paid to them are generally exempt from US withholding under the Canada–US tax treaty. More
Sector concentration: Having a large share of a portfolio, or of its income, in one industry, so a sector-wide problem affects much of it at once. More
Special dividend: A one-time dividend outside the regular schedule. It should not be annualized into the yield. More
Synthetic DRIP: A broker-run reinvestment that typically buys whole shares only, with any remainder paid in cash. More
T+1 settlement: Trades settle one business day after the trade date. Canada adopted it on May 27, 2024 and the US on May 28, 2024. More
TFSA: Tax-Free Savings Account. Canadian dividends are tax-free inside it; US dividends have 15% withheld that cannot be recovered. More
Total return: Price change plus dividends over a period. The measure that captures both income and capital. More
Trailing yield: Yield calculated from dividends actually paid over the last twelve months, divided by today's price.
W-8BEN: The IRS form a non-US individual gives a payer or broker to claim treaty benefits, such as the 15% treaty rate on US dividends for Canadian residents. More
Withholding tax: Tax deducted at source by the payer's country before a dividend reaches a foreign investor. More
Yield on cost: Current annual dividend per share divided by your original cost per share. More
Yield trap: A stock whose high yield reflects a falling price and real risk to the dividend, rather than a durable income stream. More

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