Amy Legate-Wolfe
·4 min read
Written by Amy Legate-Wolfe at The Motley Fool Canada
When it comes to Canadians investing, it’s likely that Royal Bank of Canada (TSX:RY) comes up as one of the first options. And that’s because not only is RBC stock the largest of the Big Six Banks, it’s simply the largest stock on the TSX today!
But size isn’t everything. So let’s look at the other reasons Canadian investors might want to consider buying up RBC stock like there’s no tomorrow.
That dividend
First up, the dividend. RBC stock has a reputation for a strong dividend that consistently increases year after year. That’s even during some of the worst downturns we’ve seen. Therefore, income-oriented investors should certainly be attracted to this steady dividend, as well as its attractive growth and yield.
RBC’s strong financial position and cash flow generation capabilities also support the ability to grow that dividend, even during challenging economic conditions. This provides investors with a steady stream of income even during these downturns, and during retirement!
RBC stock currently holds a yield of 4.05% as of writing, even while the stock returns to 52-week highs. Meanwhile, that dividend remains higher than its five-year average of 3.92%, making it extra attractive today.
Stable finances
As mentioned, RBC is also well known for its stable and strong finances. RBC is one of the largest banks in Canada, with a long history of strong financial performance. In fact, even in the United States its size would match the top five institutions!
This demonstrates just how safe RBC stock is. It’s now considered one of the safest banks globally, with consistent and solid financial performance delivered over the last few years. This bank can therefore be a draw for investors who want lower-risk options in their portfolio. Especially during these volatile times.
RBC’s financial strength is evident in its profitability and capital ratios, which continue to exceed regulatory requirements. So this strong foundation is yet another reason to consider RBC stock if you’re looking for stability and continued success.
Growth!
While RBC stock might be stable, it’s still growing. Even as the largest of the stocks by market cap. Part of this growth comes from its diversification and geographic reach. RBC has a diversified business model with operations spanning various lucrative segments. These include personal and commercial banking, wealth management, insurance, capital markets, and investor and treasury services.
It’s a Canadian company, but its reach extends far beyond. The stock holds a presence in the United States, as well as international markets. Especially focusing more on emerging markets. This helps RBC stock not just grow, but mitigate risks associated with regional downturns.
Finally, there is even more long-term growth coming. This is from RBC stock’s recent acquisition of HSBC Canada. This is expected to bring in more cash flow and expand RBC’s reach, particularly with high-net-worth newcomers to Canada. This strategic move could therefore lead to even more revenue and future earnings growth. All in all, these strengths make RBC stock look like a strong stock no matter if you’re considering it for income, stability, or growth in the near and distant future.
The post 3 Reasons to Buy Royal Bank Stock Like There’s No Tomorrow appeared first on The Motley Fool Canada.
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Fool contributor Amy Legate-Wolfe has positions in Royal Bank of Canada. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
2024
