Stock of the Day

April 20, 2022

Royal Bank of Canada (RY)

$118.92
-$0.74 (-0.6%)
Market Cap: $169.24B

About Royal Bank of Canada

Royal Bank of Canada operates as a diversified financial service company worldwide. The company's Personal & Commercial Banking segment offers checking and savings accounts, home equity financing, personal lending, private banking, indirect lending, including auto financing, mutual funds and self-directed brokerage accounts, guaranteed investment certificates, credit cards, and payment products and solutions; and lending, leasing, deposit, investment, foreign exchange, cash management, auto dealer financing, trade products, and services to small and medium-sized commercial businesses. This segment offers financial products and services through branches, automated teller machines, and mobile sales network. Its Wealth Management segment provides a suite of wealth, investment, trust, banking, credit, and other advice-based solutions and strategies to high net worth and ultra-high net worth individuals, and institutional clients; asset management products to institutional and individual clients; and asset and investor services to financial institutions, asset managers, and asset owners. The company's Insurance segment offers life, health, home, auto, travel, wealth, annuities, property and casualty, and reinsurance advice and solutions; and business insurance services to individual, business, and group clients through its advice centers, RBC insurance stores, and mobile advisors; digital platforms; and independent brokers and partners. The company's Capital Markets segment offers advisory and origination, sales and trading, lending and financing, and transaction banking services to corporations, institutional clients, asset managers, private equity firms, and governments. The company was founded in 1864 and is headquartered in Toronto, Canada.

Royal Bank of Canada Bull Case

Here are some ways that investors could benefit from investing in Royal Bank of Canada:

  • The current stock price is $120.89, which is near its 1-year high of $128.05, indicating strong market performance and potential for further growth.
  • Royal Bank of Canada has a solid dividend yield of 3.48%, with a recent increase in its quarterly dividend to $1.0522 per share, reflecting the company's commitment to returning value to shareholders.
  • Analysts have a consensus rating of "Buy" for Royal Bank of Canada, with several firms recently upgrading their ratings, suggesting positive market sentiment and confidence in the company's future performance.
  • The company has a low debt-to-equity ratio of 0.11, indicating strong financial health and lower risk, which is attractive for investors looking for stability.
  • Royal Bank of Canada has a market capitalization of $170.98 billion, positioning it as a major player in the financial services sector, which can provide investors with a sense of security and growth potential.

Royal Bank of Canada Bear Case

Investors should be bearish about investing in Royal Bank of Canada for these reasons:

  • Despite recent upgrades, one analyst has issued a "sell" rating, indicating that there are concerns about the stock's future performance.
  • The stock has experienced fluctuations, with a recent trading down of 0.4%, which may signal volatility and uncertainty in the market.
  • Royal Bank of Canada has a PEG ratio of 1.78, which suggests that the stock may be overvalued relative to its earnings growth, potentially limiting future upside.
  • Insider selling activity has been noted, with significant shares sold by senior officers, which could raise concerns about the company's future prospects from those who are most informed.
  • The current economic environment may pose challenges for financial institutions, including potential regulatory changes and market volatility, which could impact Royal Bank of Canada's performance.

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