Financial Analysis: Royal Bank of Canada (RY) & Its Competitors

Royal Bank of Canada (NYSE: RY) is one of 314 public companies in the “Banks” industry, but how does it compare to its peers? We will compare Royal Bank of Canada to related businesses based on the strength of its institutional ownership, earnings, profitability, risk, valuation, analyst recommendations and dividends.

Profitability

This table compares Royal Bank of Canada and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Royal Bank of Canada 22.62% 17.01% 0.95%
Royal Bank of Canada Competitors 18.59% 8.29% 0.93%

Earnings and Valuation

This table compares Royal Bank of Canada and its peers revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Royal Bank of Canada $40.37 billion $8.74 billion 13.95
Royal Bank of Canada Competitors $5.52 billion $831.31 million 405.03

Royal Bank of Canada has higher revenue and earnings than its peers. Royal Bank of Canada is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Dividends

Royal Bank of Canada pays an annual dividend of $2.87 per share and has a dividend yield of 3.4%. Royal Bank of Canada pays out 47.4% of its earnings in the form of a dividend. As a group, “Banks” companies pay a dividend yield of 1.9% and pay out 34.9% of their earnings in the form of a dividend.

Analyst Recommendations

This is a summary of current recommendations for Royal Bank of Canada and its peers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Royal Bank of Canada 1 6 1 0 2.00
Royal Bank of Canada Competitors 2248 8750 8737 354 2.36

Royal Bank of Canada presently has a consensus price target of $100.50, suggesting a potential upside of 19.08%. As a group, “Banks” companies have a potential downside of 8.10%. Given Royal Bank of Canada’s higher probable upside, equities research analysts clearly believe Royal Bank of Canada is more favorable than its peers.

Institutional & Insider Ownership

40.6% of Royal Bank of Canada shares are owned by institutional investors. Comparatively, 52.1% of shares of all “Banks” companies are owned by institutional investors. 10.4% of shares of all “Banks” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk and Volatility

Royal Bank of Canada has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500. Comparatively, Royal Bank of Canada’s peers have a beta of 0.80, suggesting that their average share price is 20% less volatile than the S&P 500.

Summary

Royal Bank of Canada beats its peers on 8 of the 15 factors compared.

Royal Bank of Canada Company Profile

Royal Bank of Canada (RBC), is a diversified financial services company. The Company provides personal and commercial banking, wealth management services, insurance, investor services and capital markets products and services on a global basis. The Company serves personal, business, public sector and institutional clients in Canada, the United States and approximately 40 other countries. The Company’s business segments include Personal and Commercial Banking, Wealth Management, Insurance, Investor and Treasury Services, Capital Markets. The Company, through its segments, serves various lines of businesses, which include Personal Financial Services, Business Financial Services, Cards and Payment Solutions (Canadian Banking), Caribbean and United States Banking, Canadian Wealth Management, United States and International Wealth Management, Global Asset Management, Canadian Insurance, International Insurance, Corporate and Investment Banking, Global Markets and Other.

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