royal bank
ROYAL BANK OF CANADA $76 (Toronto symbol RY; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.4 billion; Market cap: $106.4 billion; Price-to-sales ratio: 3.4; Dividend yield: 4.0%; TSINetwork Rating: Above Average; www.rbc.com) is selling its private banking and wealth management businesses in Switzerland. Together, these operations have around $2 billion of assets. The sale is part of Royal’s plan to sell less important overseas operations. It will use the proceeds to expand its wealth management businesses in more profitable regions, including North America, the U.K. and Asia. Royal Bank is a buy.
ROYAL BANK OF CANADA $76 (Toronto symbol RY; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.4 billion; Market cap: $106.4 billion; Price-to-sales ratio: 3.4; Dividend yield: 4.0%; TSINetwork Rating: Above Average; www.rbc.com) is selling its private banking and wealth management businesses in Switzerland. Together, these operations have around $2 billion of assets. The sale is part of Royal’s plan to sell less important overseas operations. It will use the proceeds to expand its wealth management businesses in more profitable regions, including North America, the U.K. and Asia. Royal Bank is a buy.
Exchange traded funds (ETFs) are set up to mirror the performance of a stock market index or sub-index. They hold a more or less fixed selection of securities that represent the holdings that go into the calculation of the index or sub-index. ETFs trade on stock exchanges, just like stocks. That’s different from mutual funds, which you can only buy at the end of the day at a price that reflects the fund’s value at the close of trading. Prices of ETFs are quoted in newspaper stock tables and online. You pay brokerage commissions to buy and sell them, but their low management fees give them a cost advantage over most mutual funds....
ROYAL BANK OF CANADA $79 (Toronto symbol RY; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.4 billion; Market cap: $110.6 billion; Price-to-sales ratio: 3.8; Dividend yield: 3.8%; TSINetwork Rating: Above Average; www.rbc.com) earned $2.3 billion in its fiscal 2014 fourth quarter, which ended October 31, 2014. That’s up 11.0% from $2.1 billion a year earlier. Per-share earnings rose 12.9%, to $1.57 from $1.39, on fewer shares outstanding. Revenue improved 5.8%, to $8.4 billion from $7.9 billion.
Earnings at Royal’s Canadian and U.S. retail banking division (which supplied 52% of the total) rose 7.6% on strong loan growth and higher fee-based income. The securities trading division (18% of total earnings) saw its profits fall 14.3% on lower trading volumes, and costs to comply with new U.S. securities regulations.
The bank’s wealth management division (13%) reported 41.1% higher earnings, mainly because rising stock prices increased the value of its assets under administration. Insurance earnings (12%) jumped 139.3%, mainly because a charge related to new Canadian tax laws depressed the year-earlier earnings. Without this charge, this business’s earnings rose 14% on fewer claims. The investor and treasury services business’s earnings (5%) gained 24.2%, thanks to higher deposit volumes and better efficiency.
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Earnings at Royal’s Canadian and U.S. retail banking division (which supplied 52% of the total) rose 7.6% on strong loan growth and higher fee-based income. The securities trading division (18% of total earnings) saw its profits fall 14.3% on lower trading volumes, and costs to comply with new U.S. securities regulations.
The bank’s wealth management division (13%) reported 41.1% higher earnings, mainly because rising stock prices increased the value of its assets under administration. Insurance earnings (12%) jumped 139.3%, mainly because a charge related to new Canadian tax laws depressed the year-earlier earnings. Without this charge, this business’s earnings rose 14% on fewer claims. The investor and treasury services business’s earnings (5%) gained 24.2%, thanks to higher deposit volumes and better efficiency.
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ROYAL BANK OF CANADA $79 (Toronto symbol RY; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.4 billion; Market cap: $110.6 billion; Price-to-sales ratio: 3.8; Dividend yield: 3.8%; TSINetwork Rating: Above Average; www.rbc.com) earned $2.3 billion in its fiscal 2014 fourth quarter, which ended October 31, 2014. That’s up 11.0% from $2.1 billion a year earlier. Per-share earnings rose 12.9%, to $1.57 from $1.39, on fewer shares outstanding. Revenue improved 5.8%, to $8.4 billion from $7.9 billion. Earnings at Royal’s Canadian and U.S. retail banking division (which supplied 52% of the total) rose 7.6% on strong loan growth and higher fee-based income. The securities trading division (18% of total earnings) saw its profits fall 14.3% on lower trading volumes, and costs to comply with new U.S. securities regulations. The bank’s wealth management division (13%) reported 41.1% higher earnings, mainly because rising stock prices increased the value of its assets under administration. Insurance earnings (12%) jumped 139.3%, mainly because a charge related to new Canadian tax laws depressed the year-earlier earnings. Without this charge, this business’s earnings rose 14% on fewer claims. The investor and treasury services business’s earnings (5%) gained 24.2%, thanks to higher deposit volumes and better efficiency....
ROYAL BANK OF CANADA, $83.16, Toronto symbol RY, plans to close its wealth management operations in the Caribbean, as the region’s slowing growth and high unemployment have hurt this business’s prospects. Royal recently sold its retail banking operations in Jamaica for the same reasons. The bank did not say how much it expects to pay in severance and other costs. However, this move will free up cash it can use to expand its faster-growing wealth management operations in Canada, the U.S., the U.K. and Asia. In the quarter ended July 31, 2014, earnings at Royal’s wealth management division rose 22.3% from a year earlier and accounted for 11.9% of its total earnings. Royal Bank is a buy....
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%.
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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%.
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Canada’s big five banks will likely report record earnings in 2014, as low interest rates keep fueling loan demand. The improving economy also means the banks are dealing with fewer bad loans, giving them more room for dividend hikes. Every Canadian investor should own at least two of our banks. For new buying, TD and Bank of Nova Scotia remain our top picks. TORONTO-DOMINION BANK $57 (Toronto symbol TD; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.8 billion; Market cap: $102.6 billion; Price-to-sales ratio: 3.0; Dividend yield: 3.3%; TSINetwork Rating: Above Average; www.td.comtarget="_blank”) is Canada’s largest bank, with $921.8 billion of assets....
We still think investors will profit most—and with the least risk—by buying shares of well-established, dividend-paying stocks with strong business prospects.
These are companies that have strong positions in healthy industries. They also have strong management that will make the right moves to remain competitive in a changing marketplace.
Stocks like these give investors an additional measure of safety in today’s volatile markets. And the best ones offer an attractive combination of moderate p/e’s (the ratio of a stock’s price to its per-share earnings), steady or rising dividend yields (annual dividend divided by the share price) and promising growth prospects.
Here are 20 stocks we think meet those criteria:
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These are companies that have strong positions in healthy industries. They also have strong management that will make the right moves to remain competitive in a changing marketplace.
Stocks like these give investors an additional measure of safety in today’s volatile markets. And the best ones offer an attractive combination of moderate p/e’s (the ratio of a stock’s price to its per-share earnings), steady or rising dividend yields (annual dividend divided by the share price) and promising growth prospects.
Here are 20 stocks we think meet those criteria:
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DIVIDEND INDEX FUND $25.38 (Toronto symbol XDV; buy or sell through brokers; ca.ishares.com) holds 30 of the highest-yielding Canadian stocks. Its selections are based on dividend growth, yield and payout ratio. The weight of any one stock is limited to 10% of its assets. The fund’s MER is 0.55%. It yields 3.8%.
The fund’s top holdings are CIBC, 7.4%; National Bank, 6.9%; TD Bank, 6.7%; Bank of Montreal, 6.0%; Bonterra Energy, 6.0%; Royal Bank, 5.3%; Bank of Nova Scotia, 4.6%; BCE, 4.1%; Trans- Canada, 3.9%; and Laurentian Bank, 3.8%.
The ETF holds 53.0% of its assets in financial stocks. The top Canadian finance stocks have sound prospects. However, if you invest in this ETF, be sure to adjust the rest of your portfolio so it won’t be overly concentrated in the financial sector.
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The fund’s top holdings are CIBC, 7.4%; National Bank, 6.9%; TD Bank, 6.7%; Bank of Montreal, 6.0%; Bonterra Energy, 6.0%; Royal Bank, 5.3%; Bank of Nova Scotia, 4.6%; BCE, 4.1%; Trans- Canada, 3.9%; and Laurentian Bank, 3.8%.
The ETF holds 53.0% of its assets in financial stocks. The top Canadian finance stocks have sound prospects. However, if you invest in this ETF, be sure to adjust the rest of your portfolio so it won’t be overly concentrated in the financial sector.
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