When I look at insider trading I find $2.6M of insider selling and $2.6M of net insider selling. There is a very small amount of insider buying. Insider selling is 0.002% of market cap that is way under 1% of the market cap of this bank and is therefore a relatively very minor amount.
There is some insider ownership with the CEO owning shares worth around $1.6M, the CFO owning shares worth around $1.4M and the Chairman owning shares worth around 2.5M. Of course, as a percentage of the market cap insider ownership is relatively very minor.
I cannot find a mission statement on their website but statements there seem to hit all points:
- Always earning the right to be our clients' first choice
- We give our people the tools and support to grow and enrich their careers.
- Our first priority is doing our jobs as bankers well, and serving our clients with integrity, every day.
- At RBC, we also take our responsibilities in the community, marketplace, workplace and to the planet seriously.
- We are committed to delivering excellent long-term returns to our shareholders.
I get a Graham Price of $69.94. The 10 year low, median and high median Price/Graham Price Ratios are 1.03, 1.21 and 1.41. The current P/GP Ratio is 1.11 based on a stock price of $77.48. This stock price test suggests that the stock is priced relatively reasonable.
I get a 10 year Price/Book Value per Share Ratio of 2.25. The current P/B Ratio is 2.30 based on a stock price of $77.48 and BVPS of $33.71. The current P/B Ratio is just 2% higher than the 10 year median. This stock price test suggests that the stock is priced relatively reasonable.
The current dividend yield is 3.87% based on a dividend of $3.00 and a stock price of $77.48. The 5 year median dividend yield is 3.91% and the historical median dividend yield is 3.92%. The current dividend yield is just 1% and 1.2% lower than these dividend yields. This stock price test suggests that the stock is priced relatively reasonable.
When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus recommendation would be a Buy. The 12 month stock price consensus is $87.00. This implies a total return of 16.16% with 3.87% from dividends and 12.29% from capital gains.
In a recent report the Motley Fool thought this bank was expensive at P/E Ratio of 13.5. This Financial Post article talks about RBC selling its Swiss banking operations. Another Financial Post article talks about RBC settling a lawsuit with U.S. regulators. In July 2013 the Dividend Growth Investing and Retirement blogger did a review of this bank.
Sound bite for Twitter and StockTwits is: On my tests stock price looks reasonable. See my spreadsheet at ry.htm.
This is the second of two parts. The first part was posted on Monday, January 12, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.
Royal Bank of Canada (RY on TSX and NYSE) and its subsidiaries operate under the master brand name RBC. They are one of Canada's largest banks as measured by assets and market capitalization, and are among the largest banks in the world, based on market capitalization. They provide diversified financial services companies, and provide personal and commercial banking, wealth management services, insurance, corporate and investment banking and transaction processing services on a global basis. They have personal, business, public sector and institutional clients through offices in Canada, the U.S. and 56 other countries. Its web site is here RBC.
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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
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