TSX:RY

Stock Analysis Report

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Royal Bank of Canada

Executive Summary

Royal Bank of Canada operates as a diversified financial service company worldwide. More Details


Snowflake Analysis

Flawless balance sheet established dividend payer.


Similar Companies

Share Price & News

How has Royal Bank of Canada's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: RY has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.2%

RY

-0.9%

CA Banks

-0.9%

CA Market


1 Year Return

-9.8%

RY

-16.2%

CA Banks

-4.2%

CA Market

Return vs Industry: RY exceeded the Canadian Banks industry which returned -16.2% over the past year.

Return vs Market: RY underperformed the Canadian Market which returned -4.2% over the past year.


Shareholder returns

RYIndustryMarket
7 Day-1.2%-0.9%-0.9%
30 Day1.6%-0.1%1.2%
90 Day0.8%1.2%1.4%
1 Year-6.6%-9.8%-12.1%-16.2%-0.7%-4.2%
3 Year6.8%-4.3%-4.0%-15.7%6.6%-3.8%
5 Year52.5%26.3%34.1%8.6%34.2%13.5%

Price Volatility Vs. Market

How volatile is Royal Bank of Canada's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Royal Bank of Canada undervalued compared to its fair value and its price relative to the market?

12.29x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: RY (CA$95.9) is trading above our estimate of fair value (CA$84.26)

Significantly Below Fair Value: RY is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: RY is poor value based on its PE Ratio (12.3x) compared to the CA Banks industry average (11x).

PE vs Market: RY is good value based on its PE Ratio (12.3x) compared to the Canadian market (16.5x).


Price to Earnings Growth Ratio

PEG Ratio: RY is poor value based on its PEG Ratio (1.6x)


Price to Book Ratio

PB vs Industry: RY is overvalued based on its PB Ratio (1.7x) compared to the CA Banks industry average (1x).


Next Steps

Future Growth

How is Royal Bank of Canada forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

7.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RY's forecast earnings growth (7.6% per year) is above the savings rate (1.7%).

Earnings vs Market: RY's earnings (7.6% per year) are forecast to grow slower than the Canadian market (21.1% per year).

High Growth Earnings: RY's earnings are forecast to grow, but not significantly.

Revenue vs Market: RY's revenue (1.2% per year) is forecast to grow slower than the Canadian market (5.8% per year).

High Growth Revenue: RY's revenue (1.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: RY's Return on Equity is forecast to be low in 3 years time (14.7%).


Next Steps

Past Performance

How has Royal Bank of Canada performed over the past 5 years?

5.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RY has high quality earnings.

Growing Profit Margin: RY's current net profit margins (25.9%) are lower than last year (29%).


Past Earnings Growth Analysis

Earnings Trend: RY's earnings have grown by 5.3% per year over the past 5 years.

Accelerating Growth: RY's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: RY had negative earnings growth (-11.9%) over the past year, making it difficult to compare to the Banks industry average (-14.8%).


Return on Equity

High ROE: RY's Return on Equity (13.2%) is considered low.


Next Steps

Financial Health

How is Royal Bank of Canada's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet


Financial Institutions Analysis

Asset Level: RY's Assets to Equity ratio (19.5x) is moderate.

Allowance for Bad Loans: RY has a sufficient allowance for bad loans (143%).

Low Risk Liabilities: 64% of RY's liabilities are made up of primarily low risk sources of funding.

Loan Level: RY has an appropriate level of Loans to Assets ratio (39%).

Low Risk Deposits: RY's Loans to Deposits ratio (64%) is appropriate.

Level of Bad Loans: RY has an appropriate level of bad loans (0.6%).


Next Steps

Dividend

What is Royal Bank of Canada current dividend yield, its reliability and sustainability?

4.50%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: RY's dividend (4.5%) is higher than the bottom 25% of dividend payers in the Canadian market (1.69%).

High Dividend: RY's dividend (4.5%) is low compared to the top 25% of dividend payers in the Canadian market (5.78%).


Stability and Growth of Payments

Stable Dividend: RY's dividends per share have been stable in the past 10 years.

Growing Dividend: RY's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (54.6%), RY's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: RY's dividends in 3 years are forecast to be well covered by earnings (45.1% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.4yrs

Average management tenure


CEO

Dave McKay (57 yo)

6.17yrs

Tenure

CA$13,693,903

Compensation

Mr. David I. McKay, also known as Dave, has been the President of Royal Bank of Canada since February 26, 2014 and has been its Chief Executive Officer since August 1, 2014. Mr. McKay is responsible for th ...


CEO Compensation Analysis

Compensation vs Market: Dave's total compensation ($USD10.43M) is above average for companies of similar size in the Canadian market ($USD7.07M).

Compensation vs Earnings: Dave's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
David McKay
President6.17yrsCA$13.69m0.0026%
CA$ 3.6m
Rod Bolger
Chief Financial Officer3.83yrsCA$4.33m0.00041%
CA$ 560.8k
Douglas Guzman
Group Head of Wealth Management14.75yrsCA$7.07m0.00032%
CA$ 437.7k
Neil McLaughlin
Group Head of Personal & Commercial Banking3.42yrsCA$4.91m0.00043%
CA$ 588.2k
Bruce Ross
Group Head of Technology & Operations6.75yrsCA$7.89m0.00027%
CA$ 369.3k
Gay Mitchell
Deputy Chairman of RBC Wealth Managementno datano datano data
Christoph Knoess
Chief Administrative Officer0.83yrno datano data
Nadine Ahn
Senior VP of Wholesale Finance & Investor Relationsno datano datano data
David Onorato
General Counsel5.42yrsno datano data
Amy Cairncross
Senior Vice President of Communicationsno datano datano data
Greg Clark
Chief Marketing Officer7.58yrsno datano data
Michael Dobbins
Chief Strategy & Corporate Development Officer3.92yrsno data0.00033%
CA$ 451.4k

5.4yrs

Average Tenure

Experienced Management: RY's management team is seasoned and experienced (5.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
David McKay
President6.17yrsCA$13.69m0.0026%
CA$ 3.6m
Kathleen Taylor
Independent Chairman of the Board6.83yrsCA$525.00k0.0022%
CA$ 3.0m
James Pettigrew
Chairman of RBC Europe Ltd3.58yrsno datano data
Heather Munroe-Blum
Independent Director9.33yrsCA$250.00k0.00012%
CA$ 164.1k
Alice Laberge
Independent Director15yrsCA$291.67k0.00035%
CA$ 478.7k
Michael McCain
Independent Director15yrsCA$250.00k0.0011%
CA$ 1.4m
Frank Vettese
Independent Director1.75yrsCA$83.33k0.00067%
CA$ 916.4k
Thierry Vandal
Independent Director5.25yrsCA$262.50k0.000080%
CA$ 109.4k
David Denison
Independent Director8.17yrsCA$300.00k0.000080%
CA$ 109.4k
Jacynthe Côté
Independent Director6.08yrsCA$300.00k0.00014%
CA$ 191.5k
Bridget van Kralingen
Independent Director9.33yrsCA$250.00k0.00011%
CA$ 150.5k
Toos Daruvala
Independent Director5.75yrsCA$300.00k0.00010%
CA$ 136.8k

6.5yrs

Average Tenure

61.5yo

Average Age

Experienced Board: RY's board of directors are considered experienced (6.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Royal Bank of Canada's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Royal Bank of Canada
  • Ticker: RY
  • Exchange: TSX
  • Founded: 1864
  • Industry: Diversified Banks
  • Sector: Banks
  • Market Cap: CA$136.782b
  • Shares outstanding: 1.42b
  • Website: https://www.rbc.com

Number of Employees


Location

  • Royal Bank of Canada
  • Royal Bank Canada
  • 200 Bay Street
  • Toronto
  • Ontario
  • M5J 2J5
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RYNYSE (New York Stock Exchange)YesCommon SharesUSUSDDec 1972
RYTSX (The Toronto Stock Exchange)YesCommon SharesCACADDec 1972
RYSWX (SIX Swiss Exchange)YesCommon SharesCHCHFDec 1972
RY NBMV (Bolsa Mexicana de Valores)YesCommon SharesMXMXNDec 1972
RYCDB (Deutsche Boerse AG)YesCommon SharesDEEURDec 1972
0QKULSE (London Stock Exchange)YesCommon SharesGBCHFDec 1972
RY.PRLTSX (The Toronto Stock Exchange)5YR PFD-AL CVCACADNov 2008
RY.PRZTSX (The Toronto Stock Exchange)1ST PFD SER AZCACADJan 2014
RY.PRJTSX (The Toronto Stock Exchange)PFD SHS SER BDCACADFeb 2015
RY.PRMTSX (The Toronto Stock Exchange)PFD SER BFCACADMar 2015
RY.PROTSX (The Toronto Stock Exchange)PFD BI NVCCCACADJul 2015
RY.PRPTSX (The Toronto Stock Exchange)1ST PFD SER BJCACADOct 2015
RY.PRTNYSE (New York Stock Exchange)DEP 1/40 6.75% CUSUSDNov 2015
RY.PRQTSX (The Toronto Stock Exchange)PFD SER BKCACADDec 2015
RY.PRRTSX (The Toronto Stock Exchange)PDF SER BMCACADMar 2016
RY.PRSTSX (The Toronto Stock Exchange)1ST PFD SHS BOCACADNov 2018

Biography

Royal Bank of Canada operates as a diversified financial service company worldwide. The company’s Personal & Commercial Banking segment offers check and savings accounts, credit cards, mortgages, loans, in ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/21 00:26
End of Day Share Price2020/10/20 00:00
Earnings2020/07/31
Annual Earnings2019/10/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.