Royal Bank of Canada (TSX:RY) - Share price, News & Analysis

Q: What is the Fair Price of RY when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

RY (CA$124.37) is trading below our estimate of [[fair value]] (CA$224.53)

RY fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	2/6
Past Performance	3/6
Financial Health	6/6
Dividends	5/6

RY Stock Overview

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

Rewards

Trading at 44.6% below our estimate of its fair value

Earnings are forecast to grow 2.83% per year

Earnings have grown 7.4% per year over the past 5 years

Pays a reliable dividend of 4.12%

Trading below our calculated fair Price-To-Earnings ratio

Risk Analysis

No risks detected for RY from our risk checks.

Royal Bank of Canada Competitors

Toronto-Dominion Bank

TSX:TD

CA$153.6b

Bank of Montreal

TSX:BMO

CA$81.3b

Bank of Nova Scotia

TSX:BNS

CA$78.3b

Canadian Imperial Bank of Commerce

TSX:CM

CA$54.7b

Price History & Performance

Summary of all time highs, changes and price drops for Royal Bank of Canada
Historical stock prices
Current Share Price	CA$124.37
52 Week High	CA$149.60
52 Week Low	CA$118.24
Beta	0.76
1 Month Change	1.08%
3 Month Change	-1.05%
1 Year Change	-1.38%
3 Year Change	17.50%
5 Year Change	26.77%
Change since IPO	1,880.02%

Shareholder Returns

	RY	CA Banks	CA Market
7D	0.8%	-0.5%	-0.008%
1Y	-1.4%	-6.3%	-6.6%

Return vs Industry: RY exceeded the Canadian Banks industry which returned -6.3% over the past year.

Return vs Market: RY exceeded the Canadian Market which returned -6.6% over the past year.

Price Volatility

Is RY's price volatile compared to industry and market?
RY volatility
RY Average Weekly Movement	2.8%
Banks Industry Average Movement	2.8%
Market Average Movement	10.0%
10% most volatile stocks in CA Market	18.0%
10% least volatile stocks in CA Market	3.8%

Stable Share Price: RY is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: RY's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1864	88,541	Dave McKay	https://www.rbc.com

Royal Bank of Canada operates as a diversified financial service company worldwide. The company’s Personal & Commercial Banking segment offers checking and savings accounts, home equity financing, personal lending, private banking, indirect lending, including auto financing, mutual funds and self-directed brokerage accounts, guaranteed investment certificates, credit cards, and payment products and solutions; and lending, leasing, deposit, investment, foreign exchange, cash management, auto dealer financing, trade products, and services to small and medium-sized commercial businesses. This segment offers financial products and services through branches, automated teller machines, and mobile sales network.

Royal Bank of Canada Fundamentals Summary

How do Royal Bank of Canada's earnings and revenue compare to its market cap?
RY fundamental statistics
Market Cap	CA$173.09b
Earnings (TTM)	CA$15.56b
Revenue (TTM)	CA$48.92b

11.1x

P/E Ratio

1.8x

P/B Ratio

Is RY overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
RY income statement (TTM)
Revenue	CA$48.92b
Cost of Revenue	CA$0
Gross Profit	CA$48.92b
Other Expenses	CA$33.36b
Earnings	CA$15.56b

Last Reported Earnings

Jul 31, 2022

Next Earnings Date

Nov 30, 2022

Earnings per share (EPS)	11.18
Gross Margin	100.00%
Net Profit Margin	31.80%
Debt/Equity Ratio	395.3%

How did RY perform over the long term?

See historical performance and comparison

Dividends

4.1%

Current Dividend Yield

43%

Payout Ratio

Does RY pay a reliable dividends?

See RY dividend history and benchmarks

When do you need to buy RY by to receive an upcoming dividend?
Royal Bank of Canada dividend dates
Ex Dividend Date	Oct 25 2022
Dividend Pay Date	Nov 24 2022
Days until Ex dividend	22 days
Days until Dividend pay date	52 days

Does RY pay a reliable dividends?

See RY dividend history and benchmarks

We’ve recently updated our valuation analysis.

Valuation

Is RY undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for RY?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for RY. This is calculated by dividing RY's market cap by their current preferred multiple.
What is RY's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CA$173.09b

RY key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	n/a
Enterprise Value/EBITDA	n/a
PEG Ratio	3.9x

Price to Earnings Ratio vs Peers

How does RY's PE Ratio compare to its peers?

RY PE Ratio vs Peers

The above table shows the PE ratio for RY vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	8.6x
TD Toronto-Dominion Bank	10.7x	1.4%	CA$153.6b
BMO Bank of Montreal	7.4x	-13.9%	CA$81.3b
BNS Bank of Nova Scotia	7.7x	2.4%	CA$78.3b
CM Canadian Imperial Bank of Commerce	8.7x	4.8%	CA$54.7b
RY Royal Bank of Canada	11.1x	2.8%	CA$173.1b

Price-To-Earnings vs Peers: RY is expensive based on its Price-To-Earnings Ratio (11.1x) compared to the peer average (8.6x).

Price to Earnings Ratio vs Industry

How does RY's PE Ratio compare vs other companies in the North American Banks Industry?

Price-To-Earnings vs Industry: RY is expensive based on its Price-To-Earnings Ratio (11.1x) compared to the North American Banks industry average (9.4x)

Price to Earnings Ratio vs Fair Ratio

What is RY's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

RY PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	11.1x
Fair PE Ratio	13.7x

Price-To-Earnings vs Fair Ratio: RY is good value based on its Price-To-Earnings Ratio (11.1x) compared to the estimated Fair Price-To-Earnings Ratio (13.7x).

Share Price vs Fair Value

What is the Fair Price of RY when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: RY (CA$124.37) is trading below our estimate of fair value (CA$224.53)

Significantly Below Fair Value: RY is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.

Discover undervalued companies

Future Growth

How is Royal Bank of Canada forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

2.8%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: RY's forecast earnings growth (2.8% per year) is above the savings rate (1.6%).

Earnings vs Market: RY's earnings (2.8% per year) are forecast to grow slower than the Canadian market (7.5% per year).

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

Revenue vs Market: RY's revenue (7.1% per year) is forecast to grow faster than the Canadian market (5.8% per year).

High Growth Revenue: RY's revenue (7.1% 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 (15.3%).

Discover growth companies

Past Performance

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

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

7.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: RY has high quality earnings.

Growing Profit Margin: RY's current net profit margins (31.8%) are higher than last year (31.2%).

Past Earnings Growth Analysis

Earnings Trend: RY's earnings have grown by 7.4% per year over the past 5 years.

Accelerating Growth: RY's earnings growth over the past year (2.8%) is below its 5-year average (7.4% per year).

Earnings vs Industry: RY earnings growth over the past year (2.8%) underperformed the Banks industry 9.3%.

Return on Equity

High ROE: RY's Return on Equity (15.2%) is considered low.

Discover strong past performing companies

Financial Health

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

Financial Health Score

6/6

Financial Health Score 6/6

Asset Level
Allowance for Bad Loans
Low Risk Liabilities
Loan Level
Low Risk Deposits
Level of Bad Loans

Financial Position Analysis

Debt to Equity History and Analysis

Balance Sheet

Financial Institutions Analysis

Asset Level: RY's Assets to Equity ratio (17.7x) is moderate.

Allowance for Bad Loans: RY has a sufficient allowance for bad loans (178%).

Low Risk Liabilities: 68% 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 (43%).

Low Risk Deposits: RY's Loans to Deposits ratio (68%) is appropriate.

Level of Bad Loans: RY has an appropriate level of bad loans (0.3%).

Discover healthy companies

Dividend

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

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

4.12%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Royal Bank of Canada Dividend Yield vs Market

How does Royal Bank of Canada dividend yield compare to the market?
Segment	Dividend Yield
Company (Royal Bank of Canada)	4.1%
Market Bottom 25% (CA)	2.0%
Market Top 25% (CA)	6.1%
Industry Average (Banks)	4.6%
Analyst forecast in 3 Years (Royal Bank of Canada)	4.3%

Notable Dividend: RY's dividend (4.12%) is higher than the bottom 25% of dividend payers in the Canadian market (2.01%).

High Dividend: RY's dividend (4.12%) is low compared to the top 25% of dividend payers in the Canadian market (6.08%).

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

Earnings Coverage: With its reasonably low payout ratio (43.2%), RY's dividend payments are well covered by earnings.

Future Payout to Shareholders

Future Dividend Coverage: RY's dividends in 3 years are forecast to be well covered by earnings (47.8% payout ratio).

Discover strong dividend paying companies

Management

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

2.9yrs

Average management tenure

CEO

Dave McKay (59 yo)

8.17yrs

Tenure

CA$16,671,877

Compensation

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

CEO Compensation Analysis

Dave McKay's Compensation vs Royal Bank of Canada Earnings

How has Dave McKay's remuneration changed compared to Royal Bank of Canada's earnings?
Date	Total Comp.	Salary	Company Earnings
Jul 31 2022	n/a	n/a	CA$16b
Apr 30 2022	n/a	n/a	CA$16b
Jan 31 2022	n/a	n/a	CA$16b
Oct 31 2021	CA$17m	CA$2m	CA$16b
Jul 31 2021	n/a	n/a	CA$15b
Apr 30 2021	n/a	n/a	CA$14b
Jan 31 2021	n/a	n/a	CA$12b
Oct 31 2020	CA$13m	CA$2m	CA$11b
Jul 31 2020	n/a	n/a	CA$11b
Apr 30 2020	n/a	n/a	CA$11b
Jan 31 2020	n/a	n/a	CA$13b
Oct 31 2019	CA$14m	CA$2m	CA$13b
Jul 31 2019	n/a	n/a	CA$13b
Apr 30 2019	n/a	n/a	CA$12b
Jan 31 2019	n/a	n/a	CA$12b
Oct 31 2018	CA$14m	CA$2m	CA$12b
Jul 31 2018	n/a	n/a	CA$12b
Apr 30 2018	n/a	n/a	CA$11b
Jan 31 2018	n/a	n/a	CA$11b
Oct 31 2017	CA$13m	CA$2m	CA$11b
Jul 31 2017	n/a	n/a	CA$11b
Apr 30 2017	n/a	n/a	CA$11b
Jan 31 2017	n/a	n/a	CA$11b
Oct 31 2016	CA$12m	CA$1m	CA$10b
Jul 31 2016	n/a	n/a	CA$10b
Apr 30 2016	n/a	n/a	CA$10b
Jan 31 2016	n/a	n/a	CA$10b
Oct 31 2015	CA$12m	CA$1m	CA$10b

Compensation vs Market: Dave's total compensation ($USD12.14M) is above average for companies of similar size in the Canadian market ($USD8.12M).

Compensation vs Earnings: Dave's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: RY's management team is considered experienced (2.9 years average tenure).

Board Members

Experienced Board: RY's board of directors are considered experienced (7.9 years average tenure).

Ownership

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

Insider Trading Volume

Insider Buying: RY insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

TSX:RY Recent Insider Transactions by Companies or Individuals
Date	Value	Name	Entity	Role	Shares	Max Price
30 Aug 22	BuyCA$16,242	Thierry Vandal	Individual		131	CA$124.00

Ownership Breakdown

What is the ownership structure of RY?
Owner Type	Number of Shares	Ownership Percentage
Individual Insiders	160,535	0.01%
Institutions	632,653,630	45.5%
General Public	758,898,133	54.5%

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

Top Shareholders

Top 25 shareholders own 34.37% of the company

Ownership	Name	Shares	Current Value	Change %	Portfolio %
4.74%	BMO Asset Management Corp.	65,946,059	CA$8.2b	4.41%	3.7%
3.55%	The Vanguard Group, Inc.	49,461,322	CA$6.2b	1.92%	0.11%
2.79%	RBC Global Asset Management Inc.	38,847,779	CA$4.8b	-0.65%	2.71%
2.35%	RBC Dominion Securities Inc., Asset Management Arm	32,734,085	CA$4.1b	4.69%	4.37%
2.03%	TD Asset Management, Inc.	28,271,407	CA$3.5b	-1.91%	2.54%
2.01%	Mackenzie Financial Corporation	28,041,596	CA$3.5b	0.09%	3.25%
1.83%	Fidelity International Ltd	25,406,430	CA$3.2b	-6.37%	1.24%
1.41%	Canadian Imperial Bank of Commerce, Asset Management Arm	19,616,241	CA$2.4b	6.38%	7.37%
1.36%	The Bank of Nova Scotia, Banking Investments	18,871,168	CA$2.3b	-3.85%	4.5%
1.34%	Wellington Management Group LLP	18,633,272	CA$2.3b	-6.06%	0.31%
1.31%	1832 Asset Management L.P.	18,275,906	CA$2.3b	-0.57%	2.66%
1.14%	FMR LLC	15,897,221	CA$2.0b	2.17%	0.14%
1.11%	Norges Bank Investment Management	15,402,951	CA$1.9b	0%	0.19%
1.03%	Toronto-Dominion Bank, Banking Investments	14,273,878	CA$1.8b	21.61%	2.76%
0.97%	CIBC Asset Management Inc.	13,461,034	CA$1.7b	-7.15%	3.16%
0.79%	Beutel Goodman & Company Ltd.	10,964,546	CA$1.4b	-2.32%	5.78%
0.66%	Manulife Asset Management	9,207,468	CA$1.1b	4.47%	0.8%
0.64%	Connor, Clark & Lunn Investment Management Ltd.	8,950,335	CA$1.1b	-9.88%	4.81%
0.6%	Legal & General Investment Management Limited	8,400,941	CA$1.0b	10.28%	0.23%
0.6%	IG Investment Management, Ltd.	8,321,884	CA$1.0b	0%	2.42%
0.57%	Scotiabank Global Banking and Markets, Asset Management Division	7,891,351	CA$981.4m	3.07%	5.78%
0.46%	CPP Investments	6,415,800	CA$797.9m	43.18%	0.59%
0.41%	J.P. Morgan Asset Management, Inc.	5,767,013	CA$717.2m	1.65%	0.1%
0.33%	Fiera Capital Corporation	4,652,310	CA$578.6m	3.65%	0.59%
0.33%	National Bank Investments Inc.	4,603,096	CA$572.5m	-0.08%	1.8%

Ticker	Exchange	Primary Security	Security Type	Country	Currency	Listed on
RY	NYSE (New York Stock Exchange)	Yes	Common Shares	US	USD	Dec 1972
RY	TSX (The Toronto Stock Exchange)	Yes	Common Shares	CA	CAD	Dec 1972
RY	SWX (SIX Swiss Exchange)	Yes	Common Shares	CH	CHF	Dec 1972
RY N	BMV (Bolsa Mexicana de Valores)	Yes	Common Shares	MX	MXN	Dec 1972
RYC	DB (Deutsche Boerse AG)	Yes	Common Shares	DE	EUR	Dec 1972
0QKU	LSE (London Stock Exchange)	Yes	Common Shares	GB	USD	Dec 1972
RY.PRZ	TSX (The Toronto Stock Exchange)		1ST PFD SER AZ	CA	CAD	Jan 2014
RY.PRJ	TSX (The Toronto Stock Exchange)		PFD SHS SER BD	CA	CAD	Feb 2015
RBCP.F	OTCPK (Pink Sheets LLC)		PFD SHS SER BD	US	USD	Feb 2015
RY.PRM	TSX (The Toronto Stock Exchange)		PFD SER BF	CA	CAD	Mar 2015
RY.PRO	TSX (The Toronto Stock Exchange)		PFD BI NVCC	CA	CAD	Jul 2015
RY.PRT	NYSE (New York Stock Exchange)		DEP 1/40 6.75% C	US	USD	Nov 2015
RY.PRS	TSX (The Toronto Stock Exchange)		1ST PFD SHS BO	CA	CAD	Nov 2018

Data	Last Updated (UTC time)
Company Analysis	2022/10/02 00:00
End of Day Share Price	2022/09/30 00:00
Earnings	2022/07/31
Annual Earnings	2021/10/31