ROYAL BANK OF CANADA $82 - Toronto symbol RY

ROYAL BANK OF CANADA $82 (Toronto symbol RY; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.4 billion; Market cap: $114.8 billion; Price-to-sales ratio: 2.9; Dividend yield: 3.7%; TSINetwork Rating: Above Average; www.rbc.com) is Canada’s second-largest bank, with $913.9 billion of assets.

In the three months ended July 31, 2014, the bank earned $2.4 billion, up 10.2% from $2.2 billion a year earlier. Per-share earnings rose 11.0%, to $1.62 from $1.46, on fewer shares outstanding. These figures exclude unusual items, such as a $40-million loss on the sale of its Jamaican banking operations.

Revenue jumped 25.2%, to $9.0 billion from $7.2 billion. The bank set aside $283 million to cover bad loans in the latest quarter, up 6.0%, from $267 million. That’s mainly due to higher provisions at its Caribbean and Canadian corporate-lending businesses. The strong results prompted Royal to raise its quarterly dividend by 5.6%, to $0.75 a share from $0.71. The new annual rate of $3.00 yields 3.7%.

For all of 2014, Royal’s per-share earnings should rise 10.6%, to $6.13 from $5.54 in 2013. The stock trades at 13.4 times that estimate.

Royal Bank is a buy.

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