Royal Bank of Canada Shares
The Royal Bank of Canada (RBC) is one of Canada's largest financial institutions. It has branches in Canada, USA and 53 other countries where it provides, commercial banking, personal banking, insurance, corporate support, wealth management and investment solutions to over 18 million clients including individuals, corporations and public sector undertakings. More than 80,000 people are employed in this bank.
The Royal Bank of Canada (symbol -RY) is primarily listed at the Toronto Stock Exchange and the New York Stock Exchange (NYSE). With a total market capitalization upwards of 80 Billion C$ it is the largest company in Canada, and the 55th largest in the world according to the Forbes 2000 list. RBC has a good track record for investors. Their share value has been rising steadily in the last 3 years and is currently available at a price of approximately 53 USD. Driven by strong capital ratio of 14.4% and an asset to capital multiple of 16.3x, it has weathered the sub-prime crisis of last year and is on a road to recovery showing good revenues in both 2008 and the first 3 quarters of 2009 (21.5 Billion C$ - Revenue and 3.6 Billion dollar sales estimated for the year 2009). RBC also has good credit ratings from from Moody, Standard & Poor, Fitch and DBRS, averaging 'AA' with a stable outlook.
RBC stock is also buoyed by the steady and healthy dividend payout it has maintained through the years.The total dividend paid to investors in 2008 was 1.82 C$ per share and has been declared at 2.00 C$ for 2009. This is a healthy dividend yield of 3.6% to the share value. Given these numbers RBC stock can be seen as a good investment opportunity. The future prediction of the earnings from investing in RBS shares is also among the top 10 of the largest 20 banks in the world. As a total return on investment for the shareholder (calculated by adding the price appreciation of the shares and the dividend re-investment) is given at 9% annually over a 3 year period and 18% annually over a 10 year period. In the light of the present economic conditions and the state of other large banks, this is an impressive number.
RBC stocks have been stable and rising for the last 6 months of 2009 showing very strong signs of recovery. It has grown from a low of approximately 20 USD to 53 USD on the NYSE. Presently analysts believe that RBC shares show good promise and are giving either Hold or Buy ratings to the present rates.
The recovering economy of Canada gives a lot of credibility to RBC as an investment. Statistics show that Canada has been less hit by the sub-prime crisis than the US and its banking systems have been faring better than others at present. Though still in recession (GDP is going down by 2.4% in 2009) it is predicted to grow by 2.5% in 2010. Household income and debt to disposable income ratio is better than the US which means that the number of non-performing assets will be less. The main perpetrator of the crisis; inflated property values are "the least overvalued, leading up to the crisis" according to a International Monetary Fund report on Canada.
Investors looking for further information on RBC can look at the latest Investors Deck, a presentation released by the RBC on their website. This deck consists of detailed information on the financials, ratings and outlook of the bank.