Royal Bank 2

I reviewed this bank (TSX-RY) yesterday as far as my spreadsheet for the October 2008 annual statement goes. The Royal Bank is on Mike Higgs’ list at www.dividendgrowth.org/Report.htm, on the Dividend Achievers list at www.dividendachievers.com/, and on the Dividend Aristocrats list at www.tmxmoney.com/en/individual.html (see indices).

When looking at what analyst say on this stock, it would appear that most expect the Earnings per Share (EPS) to go up in 2009, and be higher than that earned in 2007 and 2008. Looking at ratings, they range from Strong Buy to Hold, with the average rating being a Buy. (See my site for information on analyst ratings.)

Looking at the charts, this stock has done better than the TSX and the Financial Sub-Index in the periods of year-to-date, 1, 3 and 5 years. If you go to 10 years, it has done as well as the Financial Sub-Index and better than the TSX. Looking at problems, the Return on Equity (ROE) at 11.8% is lower than the 5 year average of 17.7%, although, this would be expected in a bear market.

Things on the spreadsheet that points to this stock being a current good buy is that the dividend yield is about 5.7% and this is higher than the 5 year average of 3.3%; the P/E for 2009 is about 8%, and this is lower than the 5 year average of 14.5%. The Accrual Ratio is negative, and this is good, but it is not low enough to signal a buy. As I said yesterday, I have done very well by this stock as I have made a return of 19.5% per year on this stock since I bought it in 1995.

This is a bank. It provides personal and commercial banking, wealth management services, insurance, corporate and investment banking and transaction processing services on a global basis. It operates in Canada, USA, Caribbean, and other places around the globe. Its web site is www.rbc.com. See my spreadsheet at www.spbrunner.com/stocks/ry.htm. I have reloaded by spreadsheet.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.