Estimating dividend payouts isn’t always straightforward. Depending on which metric you use, your income estimate can be off by quite a bit. The trailing 12-month yield reflects what a stock or fund has paid over the past year, while the forward yield projects what it might pay based on recent announcements. The former shows actual history, while the latter relies on expectations that can change.
That’s why I prefer to do the math manually using the most recent per-share payout. Most dividend stocks have variable payments, but one exception is the Canoe EIT Income Fund (TSX: EIT.UN), which pays a consistent $0.10 per share every month.
That predictability makes it easy to calculate your annual income and build a clear plan. Here’s how EIT.UN works—and how to figure out how many shares you’d need to generate $2,000 in annual income, tax-free, inside a Tax-Free Savings Account (TFSA).
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EIT.UN explained
EIT.UN is a closed-end fund, meaning it has a fixed number of shares that trade on the stock market rather than being created or redeemed daily like regular exchange-traded funds (ETFs).
At the moment, it trades at a small discount to its net asset value (NAV)—around $15.36 market price versus $15.89 NAV—so investors are effectively buying its underlying portfolio at a slight bargain.
The fund holds roughly 40 Canadian and U.S. stocks, split about 50/50, and is actively managed. It can use up to 1.2 times leverage, allowing it to enhance returns slightly using borrowed capital.
The hallmark of EIT.UN is its steady $0.10 monthly distribution, a blend of capital gains, dividends, and return of capital. Because some of this income isn’t taxed as eligible dividends, it’s simplest to keep the fund in a registered account like a TFSA to avoid tax complications.
Despite being marketed as an income fund, its total return performance has been strong. With dividends reinvested, EIT.UN has delivered a 10-year annualized total return of 13.06%, outperforming the S&P/TSX 60 and the S&P 500.
EIT.UN dividend math
The monthly payout is $0.10 per share, or $1.20 per share annually. To earn $2,000 per year, divide your target income by the annual payout: $2,000 ÷ $1.20 = 1,667 shares (rounded).
At a current share price of $15.38, that means you’d need to invest about $25,630 to generate $2,000 in annual income, before taxes. Held in a TFSA, those monthly payments would be tax-free, making it an easy, predictable source of passive income.
To earn EIT.UN’s monthly dividend, you need to own shares before the ex-dividend date. For example, the October ex-dividend date was October 22, with a payment date of November 14.
The same pattern repeats monthly, so keep an eye on next month’s ex-dividend date—you must be a shareholder of record by that day to receive the following month’s payout.
