Topic: How To Invest

The Successful Investor Hotline – Friday, December 4, 2020

Article Excerpt

ROYAL BANK OF CANADA, $105.15, Toronto symbol RY, is a buy. Canada’s largest bank by market cap continues to benefit from improving credit quality as the economy recovers from COVID-19 and as it continues to see stronger trading volumes at its investment banking operations. In its fiscal 2020 fourth quarter, ended October 31, 2020, Royal set aside $427 million to cover future loan losses. That’s down 14.4% from $499 million a year earlier. The latest provisions are also much better than the $675 million it booked in the third quarter. As a result, the bank’s earnings in this most-recent quarter still gained 1.2%, to $3.25 billion from $3.21 billion. Per-share earnings rose 2.3%, to $2.23 from $2.18, on fewer shares outstanding. If you factor out unusual items, the bank earned $2.27 a share in the quarter. That was much better than the consensus estimate of $2.05. Earnings from Royal’s retail banking division (46% of the total) fell 7.2% due to lower interest income from its…