Income · Stocks to Consider and Updates

Royal Bank of Canada Reports Third Period Results; Lifts Dividend

Toronto’s Royal Bank of Canada (NYSE: RY – $79.61) said earnings and revenue grew in the fiscal third quarter as the country’s largest lender earned more from Wealth Management and its Personal and Commercial Banking segments. Adjusted net income rose to C$3.16 billion from C$2.83 billion in the same period of 2017. Earnings on a per share basis was $2.14 compared to $1.89 last year and three cents better than consensus views. Revenue increased by 9% to C$11.03 billion as the bank earned more net interest income and had higher insurance premiums. Wall Street was looking for C$10.7 billion. RBC said wealth management revenue rose 10% in Canada and 15% in the US, including City National, the company’s Los Angeles-based unit acquired three years ago. The gains reflect more income from higher interest rates, volume growth and higher average fee-based assets reflecting capital appreciation and net sales. Compared to the second quarter, net income was up 2%, mainly reflecting higher earnings in Personal & Commercial Banking, Wealth Management and Capital Markets, partially offset by lower earnings in Investor & Treasury Services and Insurance. RBC also lifted its quarterly dividend by 4% to $0.98 per share, payable in November.

       Full-year fiscal 2018 earnings per share should approach $8.45 vs. last year’s $7.52. Conservative income accounts may want to take a look at Royal Bank stock. It is reasonably priced at current levels and offers an attractive dividend yield of about 3.7% and projections show that more hikes in the payout (which is well covered by profits) will likely occur.

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