Sometimes, it’s not difficult to choose favourites in the stock market as everyone has the same opinion. Royal Bank of Canada (TSX:RY) has been in the limelight in the Canadian market for a long time. The stock is the largest bank in the country, and it has delivered excellent performance.
However, based on certain recent developments within the company, this can be the best time to buy RBC shares. Read along to get further insights about the same.
A leader in its field
Royal Bank of Canada stands as one of the two largest banks in Canada and ranks among the leading global banks in terms of market capitalization. Its extensive range of financial services includes various types of banking products such as capital market services, insurance services, treasury or investor services, and wealth management.
With a rich history spanning 150 years, RBC operates in 27 countries beyond Canada and the United States.
Stock developments are positive for investors
At the time of writing, Royal Bank’s stock price currently hovers around $135 per share. This implies a dividend yield of around 4.1% and equates to a price-to-earnings ratio of just under 12. For fundamental investors, these sorts of ratios (and a price-book ratio of 1.7, for that matter) indicate some strong value, both compared to the company’s historical levels and its peers.
Recently, RBC announced a cash distribution for unitholders of the ETF Series of RBC Funds and RBC ETFs. The unitholders already received their distributions on January 8.
Moreover, the Canadian finance minister has approved RBC’s request to acquire HSBC Canada. It is expected that this acquisition will strengthen RBC’s premium business segment globally. Royal Bank is looking forward to welcoming all the existing employees of HSBC Canada, demonstrating the opportunities at RBC, and allowing RBC employees and HSBC employees to work together. Also, the company is focused on delivering unmatched value to the bank’s clients at a competitive price point.
Workforce expansion
In the coming five years, RBC plans to establish a Global Banking Hub in Vancouver, positioning the city as a prominent hub for financial services. This will generate employment in technology fields like client-facing multilingual advisors, data science, fraud detection, risk management, and cyber security. Furthermore, RBC intends to upgrade its client operations and advice center teams, resulting in new employment opportunities in Manitoba.
RBC has also committed to a financing offer for the purpose of renovating and constructing sustainable housing. It has committed to donate 1% of its profit before tax every year to this cause. Moreover, It has committed to contributing to the agri-processing sector to bring innovation and secure the food supply in Canada.
Conclusion
Royal Bank certainly remains among the cornerstone investors for stock pickers and index-lovers alike. Accordingly, how this stock performs matters a great deal to the overall TSX.
I think Royal Bank should continue to remain a core holding for those who own this stock and is one to accumulate over time for those looking to build a position.
