Topic: How To Invest

The Successful Investor Hotline – Friday, January 5, 2024

Article Excerpt

ROYAL BANK OF CANADA, $134.63, Toronto symbol RY, is still a buy. The bank has received final regulatory approval to buy the Canadian operations of U.K.-based HSBC Holdings plc (New York symbol HSBC). HSBC operates 130 branches that mainly cater to businesses in industries that trade and bank internationally. It also provides banking and wealth management services to about 780,000 retail clients. In all, it had total assets of $134 billion. Royal will pay $13.5 billion in cash for these operations when it completes the transaction in the next few weeks. To put that cost in context, Royal’s market cap (the total value of all outstanding shares) is $187.9 billion. The bank expects it will cost $1 billion to integrate the HSBC operations, but also expects to realize annual cost savings of $740 million by the end of the second year. Those savings will let Royal keep raising your dividend. In fact, your quarterly payment will rise 2.2% with the February 2024 payment, to $1.38…