Paul Harris, CFA Royal Bank RY-T BUY Apr 22, 2025

Like GS-N, it's the dominant bank in its country, and trades at a premium to peers, but deserves the premium because they've expanded into the lucrative wealth management area. They don't suffer problems in US retail banking like some peers; RY exited that decades ago. The forward PE of 13-14x is slightly higher than historic and this sector, but is justified through earnings growth.

Banks in general have performed quite well this year in spite of the pressure of 5 year mortgages coming due at higher interest rates. Banks are good for long term holds of 5 to 10 years or longer with increasing dividends and capital appreciation. Royal Bank is the biggest.

The question asked the guest to compare the two with a view to buying one of them. She prefers Royal Bank right now. It just delivered record results and is growing at 10% year over year. TD has gone through a rough patch and is re-structuring which is eating into profits. She doesn't think Royal Bank will split.

A done deal. Stocks tend to split above $100, though a stock is meaningless. It's rate to see a bank rise 6% in one day after reporting monstrous earnings growth. RY has been dominant a long time. The PE remains attractived.

Any potential stock split is irrelevant. The banks have been a wonderful thing in Canada, steady dividends that get raised frequently. Wouldn't sell and pay tax just to buy something else. Cooking on all cylinders. Best bank in Canada.

Know that all the banks have upped their non-Canadian exposure, so it's now about 50/50 Canada vs. outside Canada. RY has a very efficient US investment banking business, and is trying to expand retail. 

By far the best bank in Canada, but premium for quality is a bit excessive. So he prefers some of the others.

Is always possible. It happens once in a while among Canadian banks. One reason is that the bank would want to expand liquidity. RY is the captain of the Canadian industry.

Whole Canadian banking sector is fully valued, trading effectively at record highs on valuation. Not time to load up. Time to take some profits and invest in more defensive names, as Canadian economy is on a more fragile footing than other parts of the world.

Increases dividend every year. Premium valuation for good reason -- good management team, global wealth management, big trading platforms, and good investment banking. Not as cheap as it was, but he holds because it's well run and a solid pillar of Canadian economy.

Premium valuation for a premium bank with premium assets. Likes the name, but doesn't want to pay over $200. Didn't like many of the bank earnings last quarter because PCLs were released back into earnings once worst-case tariff scenario didn't come to pass. This was premature and too optimistic. Fears our economy might get worse before it gets better.

If you have it in your portfolio, keep it. But she's holding off on buying right now.