Dividend calculator

A Dividend Reinvestment Plan automatically uses your dividends to buy more shares instead of paying cash. Those extra shares pay their own dividends, which compounds your income over time. Most Canadian brokerages offer commission-free synthetic DRIPs on whole shares.

Yield on cost is your current annual dividend divided by what you originally paid, rather than by today's share price. If a company keeps raising its dividend, a stock bought at a 4% yield might be paying you 8% or more on your original cost a decade later.

Eligible dividends from Canadian corporations receive the dividend tax credit, making them one of the most tax-efficient forms of income outside a registered account. Foreign dividends are taxed as regular income and often face withholding tax — though U.S. dividends held in an RRSP are exempt from the 15% U.S. withholding under the tax treaty.

No — an unusually high yield is often a warning sign. Yield rises when the share price falls, so a 10% yield can signal that the market expects a dividend cut. Consistent dividend growth and a sustainable payout ratio matter far more than a headline yield.