TSE:RY

Royal Bank (RY.TO)

288.01
-1.11 (0.38%)
as of Jun 26, 2026, 8:00:00 pm Market Open.
1477 watching
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Investor Insights
star iconJun 26, 2026, 12:00 am

This summary was created by AI, based on 56 opinions in the last 12 months.

Royal Bank (RY-T) is seen as a strong performer in the Canadian banking sector, boasting significant strengths in diverse areas including wealth management and capital markets. Experts laud its consistent dividend growth, with some analysts highlighting an average annual increase of over 10% in dividends. Despite these strengths, there are concerns about the current valuation, as RY is trading at a premium compared to historical averages, leading some to suggest trimming positions or waiting for a better entry point. The bank's recent quarterly earnings show resilience in the Canadian economy and increased earnings in capital markets, making it a top pick by several analysts. However, overall sentiment reflects caution due to high valuations and potential economic challenges ahead.

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Consensus
Hold
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Valuation
Overvalued
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Similar
BMO
COMMENT
If inflation and rising interest rates leads to a steeper environment, then yes, it will be positive. If Feds make a policy mistake and the yield curve flattens, it will be negative. The steeper the yield curve, the more profitable it is for banks. In the back half of next year, there is a risk of economic slowdown.
BUY
Positioned well, including across the border. Dominant in wealth management in Canada. Valuation has come back to the group. High dividend yield. Likes the story.
HOLD
He owns TD and RY right now. Setup is interesting. OSFI recently released the handcuffs on dividends and share buybacks. Usually banks do well at the beginning of a tightening cycle. We're in a tremendously over-leveraged economy. As we go along, and rates rise, banks on the other side of this credit cycle might have a tough time. He's as underweight banks as he's ever been. TD and RY are still great franchises, but he's not that excited about the banks. They can go higher, but you have to evaluate the risks of the credit cycle.
TOP PICK
Likes the whole Canadian banking sector, with net interest margins expanding. Interest rates in Canada may rise sooner than in US. Credit environment is favourable. Increasing dividends is on the menu, and she expects double digit increases, though it may not happen all at once. Diversified businesses. Yield is 3.26%. (Analysts’ price target is $143.82)
TOP PICK
Dominant personal and commercial banking in Canada, and a meaningful position in the US. Top 10 in the global capital markets business. Well diversified by line of business and geography. Leader in digital and AI, which is driving organic growth. Highly visible path to double digit total returns. Yield is 3.30%, growing at 7% a year. (Analysts’ price target is $143.22)
PAST TOP PICK
(A Top Pick Oct 14/20, Up 37%) She might sell if there was a drastic financial crisis or recession, but perhaps not even then. In 2008-9, it would have been the worst thing to sell the banks. She likes the banking sector. One of her core holdings in the Canadian banks. You can buy it here. Yield is under 4%, less than the others. Diversified. Dividend increases are coming when allowed.
BUY
Likes it. Exposure to Evergrande is not substantial. Even though economic growth cycle is bumpy, they're in the sweet spot of increasing dividends, buying back shares, lots of capital, perhaps doing acquisitions, stabilizing net interest income. Not an excessive multiple. Do well long term.
BUY
He watches small cap financials – see his Top Picks today. However amongst the group of large banks, this would seem to be his number one pick. It seems to be a little more efficient with its capital and is a leading franchise in virtually every business that they operate.
COMMENT

Owns these two banks. BNS is Canadian and Latin America, where as RBC is Canada and US. Likes BNS's exposure to Latin America. Currently under covid, it is being more hurt. The stock is lagging here because of this. RBC is doing better due to Canada and US doing better. Over the long term, RBC is the stronger and better bank, but both are good choices.

TOP PICK

It's regained its longtime premium valuation for good reason. It dominates in many areas including retail and trading. RY boasts an 18% ROE. That may last. Even at current prices, RY is well-positioned for economic recovery. It's more Canada-centric than most peers, though it does have international exposure. Pays a good 3.5% dividend yield. He foresees margin expansion among the Canadian banks, which are good at managing costs. A question is how many of their employees will come back. BNS is his second-favourite Canadian bank. (Analysts’ price target is $135.71)

BUY
She likes Canadian banks and RY is one of three she owns. Yes, they've run up this year, but were weak last year. Loan growth will resume with the economic recovery. There's still earnings upside which will drive share price. Valuations remain reasonable. Ottawa will probably allow banks to raise dividends in the fall. She's been adding at $125/share. Share prices will reflect the Canadian economy.
BUY
He likes the Canadian banks. Still going to perform well. It outperforms the TSX 4/5 years but didn't last year, so odds on that it will this year. Net interest margin pressure in the rear view mirror. Credit loss cycle more benign than feared. Top 10 global leader in capital markets. Great wealth management. OFSI likely to take handcuffs off the banks, leading to aggressive dividend increases and share buybacks. Good things ahead.
BUY

RY vs. BMO He'd favour RY over BMO. BMO has a large franchise in the US midwest. RY is more active in the east and south. RY is better managed, and that's why it has a higher valuation. Won't go too far wrong owning it. Well positioned with their US footprint, as well as being the largest and most dominant player in Canada.

HOLD
Another favourite of his. Tax-preferred dividends, even though it's on a global scale. Quality is well understood by the markets. Not sure if dividend hikes are imminent. His concern is that they overreach in capital markets, and get away from the crown jewels of the Canadian banking brands. Own, put it away, and don't think about it.
TOP PICK
25% of business comes from the US, where capital market activity is quite robust. Stock price has moved, but more to come as the Canadian and US economies open up. Still trades at a reasonable multiple. Eventually dividends and share buybacks will resume. Unused loan reserves strengthen its capital base. Yield is 3.68%. (Analysts’ price target is $123.06)
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