Demystifying interlisted stocks, and tracking A&W’s payout ratio

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Canadian investors are not better off buying shares of Canadian companies on a U.S. exchange

When I look at the U.S.-listed version of a Canadian company, it almost always seems to be up more, or down less, than its Canadian-listed counterpart. Is this just my imagination? Are Canadian investors better off buying stocks of Canadian companies on a U.S. exchange?

So no, . In fact, they will be worse off, because they would have to first convert their Canadian dollars into U.S. dollars, and brokers build a hefty profit – typically 1 per cent to 2 per cent – into their buy and sell spreads. Bottom line: If you want to invest in a Canadian company, buy it in Canadian dollars on a Canadian exchange. One exception would be if you already have U.S.

However, in the previous three quarters, when A&W’s sales are typically stronger, the payout ratio averaged a more conservative 86.7 per cent.

 

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