Royal Bank

This is a bank (TSX-RY) that I own. I bought this bank in 1995 and I have done well with it. On my original investment in 1995, I am receiving a yield of 27.5% in dividends. The dividend increases have been good on this stock. The 5 and 10 year dividend growth comes in at 11.2% per year and 13.4% per year respectively. Dividends have not been raised on this stock for over 3 years. This is what has happened with all Canadian Banks.

This bank has done quite well in a lot of areas. The worse growth is probably in earnings where the 5 and 10 year growth figures are 6% per year and 7% per year, respectively. One of the best is the growth in total returns. The 5 and 10 year growth figures are 11% per year and 12% per year, respectively. Around 4% of the total return under this stock is in dividends.

The payout ratio for earnings peaked in 2009 at some 72% and has since fallen quite sharply to a more reasonable ratio. This ratio is expected to be in the mid 40s this year. The payout ratio for cash flow has always been reasonable with a 5 year average of 35%. The Return on Equity is also doing well; with the ROE for the financial year ending October 2010 at 15.3% and the 5 year average ROE at 16.6%.

The Asset/Liability Ratio is at 1.06 and this stock has a 5 year average A/L Ratio of 1.05. This is a pretty typical one for Canadian Banks. On a final note, the Book Value has grown nicely over the years, with a 5 and 10 year growth rate of 12% per year and 9.6% per year, respectively.

This is the last bank I will write about. Of the big five banks, I only follow BMO, TD, Royal and Bank of Nova Scotia. I do not follow CIBC.

The Royal Bank of Canada 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 here Royal Bank. See my spreadsheet at ry.htm.

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 for stocks followed and investment notes. Follow me on twitter.