In the Canadian financials space, Royal Bank of Canada (TSX:RY; NYSE:RY) continues to be one of my top picks when comparing all of Canada’s largest banks, for a number of reasons.
Like all Canadian banks, Royal Bank has a strong trade record of both dividend payouts as well as dividend increases over many decades, making Royal Bank a dividend all-star from the perspective of any conservative income-oriented investor.
Currently, Royal Bank offers investors a relatively juicy dividend yield of approximately 9% which is more attractive than ever in this day and age with interest rates continuing to hover around all-time lows.
The yield on Royal Bank is approximately three times higher than Canada’s 10-year bond yield.
Royal Bank offers some serious safety for long-term investors- as Canada’s largest bank, and one of the largest banks in the world (was in the top 10 recently), it is reasonable in my opinion to compare this company’s yield to that of government bonds.
Royal Bank is widely considered to be too big to fail, offering even the most bearish investors a reasonable “worst-case” outcome, should a terrible recession indeed be on the horizon.
Given the overall sector-wide performance for Canadian financials companies of late, investors are able to pick up shares of Royal Bank, or one of its peers for that matter, at a relatively reasonable valuation.
With many of the concerns around the financial health of the average Canadian consumer likely to take some time to work its way through the market, further buying opportunities may be on the horizon, so I’d suggest taking a look at Royal Bank and nibbling away over the course of the next few years, as opportunities arise.
Invest wisely, my friends.
