Royal Bank of Canada (TSX:RY) is well known as one of the most dependable stocks on the TSX. Over the last decade, it has delivered a 124% gain for shareholders, well ahead of the TSX Composite’s 81% return. With that kind of track record, it’s no surprise that many long-term investors consider RY stock a core holding.
But in 2025, the stock has been moving sideways. While the TSX benchmark is up 7.6% year to date, Royal Bank is trading at $175.27 per share with a market cap of $247 billion, showing no major change so far this year. That lag might raise some questions, but it also opens the door to opportunity as its long-term fundamentals remain strong, and the dividend continues to offer reliable income.
In this article, let’s explore what is holding Royal Bank stock back this year and why it still might deserve a spot in your portfolio at current levels.
What’s behind Royal Bank stock’s recent underperformance?
Part of the recent declines in Royal Bank stock could be due to macro pressures as it has had to navigate through market volatility and economic uncertainty, including concerns around trade disruptions and tariffs. These factors contributed to a more cautious economic environment, which led to higher provisions for credit losses in recent quarters.
Even though some of its segments, like personal and commercial banking, grew their revenues in the latest quarter (which ended in April 2025), those gains were partly offset by higher expenses, including staff-related costs and technology investments. So, while Royal Bank is still growing, the costs of doing business have risen in parallel lately, making investors cautious.
A closer look at recent financial growth
That said, there’s more to the story once you look at the actual numbers. For the quarter ended in April, Royal Bank’s net income climbed by 11% YoY (year over year) to $4.39 billion. On an adjusted basis, that figure also rose 8% YoY to $4.53 billion.
Notably, its personal banking division was one of the strongest segments last quarter, with net income rising 14% YoY with the help of higher loan and deposit volumes. The bank’s wealth management also did well as it benefited from growing fee-based assets.
Meanwhile, Royal Bank’s recent HSBC Canada acquisition continued to add value across multiple segments, especially by boosting its pre-tax earnings.
Is Royal Bank stock a buy at current levels?
Interestingly, Royal Bank recently raised its quarterly dividend to $1.54 per share and announced plans to repurchase up to 35 million common shares. These moves show confidence in its own performance and a clear commitment to shareholder returns.
The bank is also investing heavily in data, artificial intelligence (AI), and digital platforms to improve its services and attract more customers. In addition, it’s expanding deeper into U.S. markets — unlocking access to global fee opportunities while maintaining its domestic dominance.
While Royal Bank of Canada may not be racing higher this year, its strong financials, smart investments, and proven business model still make it a very reliable stock to buy at current levels.
