Tuesday, August 26, 2014

Recent Buy - Royal Bank of Canada (NYSE:RY, TSE:RY)

22nd August 2014 I Bought 30 shares of Royal Bank of Canada (TSE: RY) at CA$80.69 per share plus commission.

Royal Bank of Canada, a diversified financial service company, provides personal and commercial banking, wealth management, insurance, investor, and capital markets products and services worldwide. The company’s Personal & Commercial Banking segment provides personal and business financial services, and cards and payment solutions. This segment offers a suite of financial products and services to individual and business clients through branch, automated teller machines, online, and telephone banking networks, as well as through proprietary sales professionals. Its Wealth Management segment provides investment, trust, banking, credit, and other wealth management solutions to affluent, high net worth, and ultra high net worth clients; and asset management products and services directly to institutional and individual clients, as well as through distribution channels and third-party distributors.
The company’s Insurance segment offers insurance products, such as life, health, property, casualty, and travel insurance products; and wealth accumulation solutions to individual and group clients, as well as through retail insurance branches, field sales representatives, call centers, online, independent insurance advisors, and affinity relationships. This segment also provides reinsurance products. Its Investor & Treasury Services segment offers custody, fund, and pension administration, as well as a suite of products to institutional investors. This segment also provides cash management, correspondent banking, trade finance, funding, and liquidity management services to financial institutions. The company’s Capital Markets segment offers corporate and investment banking, equity and debt origination and distribution, and structuring and trading products and services for public and private companies, institutional investors, governments, and central banks. Royal Bank of Canada was founded in 1864 and is headquartered in Toronto, Canada.
Royal Bank of Canada has paid dividend since 1870, that means 143 years of consecutive payouts. Dividend growth rates for 1, 3, 5 and 10 years are 11.0, 8.2, 4.8 and 11.4. (Canadian Dividend All-Star List)

August 22, 2014 Royal Bank of Canada reported record net income of CA$2,378 million for the quarter ended July 31, 2014, up CA$93 million or 4% from the prior year and up CA$177 million or 8% from last quarter. RY also announced an increase to its quarterly dividend of CA$0.04 or 6%, to CA$0.75 per share. (More here) This was the second time this year, when RY raised the dividend.

After the last dividend increase, RY now pays quarterly dividends of CA$0.75 per share in February, May, August and November.

Data Source: morningstar.com

In the last ten years, RY's EPS has developed a variously. In 2008, 2009 and 2011 it fell from the previous year. After 2011, the EPS has returned to growth and the dividend has also begun to grow again. The dividend payout ratio is also returned to less than 50%, which gives hope for a good dividend yield also in the future.

Some ratings for RY:

My last purchase 30 shares of RY increases €46.26 (CA$67.05) of expected annual dividend net income, which increases my portfolio projected annual dividend net income to €7512.11 With purchase price CA$80.69 plus commission my starting yield on cost is 3.71%. 

I intend in the future to increase the RY number of shares in my portfolio. I am also interested in adding more Canadian banks in my Portfolio.

Click here to see my portfolio.

Full Disclosure: Long RY



  1. Cant go wrong with RY. Congrats on picking some of the shares up. Let the sweet dividends start rolling


  2. Good company. I prefer insurer for the time being but financials look also good after the big dividend cuts since 2008, the beginning of the financial crises. They have recovered in a fast way.

  3. Great buy, I just recently purchase 70 shares of RY myself. :)

    Tom, RY maintained quarterly dividend at $0.50 during the financial crisis, I don't believe there was a dividend cut during that time.

  4. Royal Bank and TD are my two favorite banks. Both Rock solid and great future outlook. Nice grab hawk!

  5. Thanks for sharing your recent buy with us. I just bought, for the first time in seven years, three new stocks and one happened to be RY. I also picked up some TD and BNS. I feel large Canadian banks are probably the most sound banks in the world these days. Good pick up.

  6. DH,

    Nice buy. The Canadian banks are pretty solid, in that they basically operate in an oligopoly. I currently have positions in TD and BNS, but RY would easily be my next choice if I were to invest in another.

    Enjoy those dividends!

    Best wishes.

  7. Nice buy DH. I think this is one of the best options in the banking sector.

    Enjoy your dividends in the last days of summer!!!

  8. Hi Mark
    Yes, I have seen how long the Canadian banks have paid dividends, I read your blog regularly.

    Thanks for stopping by!

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