Royal Bank (RY.TO)

(A top pick August 16/17, up 13%) Have held for a long time. They like it and are buying it for new money. Housing market is a concern, but the mortgage market is manageable. Royal is very diversified, 23% or their revenues come from the US. This is one of their favourite banks.

Canadian and US banks have not done well this year. The problem is the flattening of the yield curve. Canadian banks are an oligopoly--they can print money. Seasonality is October. Wait.

If you have had it for 10 to 20 years then it is perpetual. As for share splits, they are almost meaningless now.

One of of three Canadian banks he owns and is long-dominated. It's at a premium valuation now and pays a slightly lower dividend, but this is a good investment long-term. It can withstand shocks to the markets which could happen in the next few years. He's certainly not selling any of his shares.

Canadian banks just reported an amazing quarter, but the stocks did nothing. Stocks go in and out of fashion, but their dividends are growing and they're buying back stock. Everyone is worried about a housing correction, but we may just
gotten out of it. He loves the Canadian banks.

The yield is 3.8% and the payout ratio is about 45%. The bank is solid, the dividend will be raised consistently. The bank’s volatility, running between $90 and $106 is normal. It has great stability, Financial stocks have been hit, globally, over the last month. He sees this as noise. He thinks the financials are oversold. (Analysts’ price target is $110.52)

Canada's largest bank and largest company and one of the largest banks it the world. It has a top ten global capital markets business. They are going to add 2 million Canadian customers with their advances in mobile and digital technology. (Analysts’ target: $110.52).

The Canadian banks have had some weakness, but RY has some good support levels and should do well going forward.

Their ROE is just not high enough to hit his radar. You could expect 8-12% annual returns on your investment. Biggest company in Canada. He expects it may split soon as it has broken above $100.

Get in now for a dividend investor? Can’t go too far wrong with Royal Bank. They favour US banks right now, not Canadian. US economy and housing doing better, whereas Canada has housing mortgage risks. Long-term steady dividend payer, as long as you take a long-term view, a good core name to own. May want to mix in some blue-chip US banks like JP Morgan or Citigroup.

Royal’s down a bit. Good 2nd quarter results of 11% growth year over year. Performance gap between them and TD, which is not deserved. Good loan growth coming out of the US. Yield is about 3.6%, payout ratio is low. Dividend growth will track earnings growth. (Analysts’ price target is $110.52)

The valuation is good compared to BMO or TD. Still has decent excess capital. Could hit $110-114. (Analysts' price target: $110.62)

He used this as a proxy for the Canadian financial sector. Definitely in a downward trend with lower lows and lower highs. Maybe a good time to buy, but would be speculative at this point.

He has trimmed his position in this to a small position. It's a go-to name with a secure dividend that will rise. It's trading at its upper range though. Still a good long-term investment despite headwinds that Canadian banks face.

All Canadian banks are good value these days. But there are shorts south of the border. There is some risk in the mortgage portfolio. This one is not his favorite bank mainly because of its limited exposure to the US. Good yield. These are economy stocks. If you believe the economy is going to do OK, they are going to do just fine. Good investment.