While earnings reports from Canadian bank stocks haven’t all been winners lately, there’s usually been at least a little good in most of them so far. Royal Bank of Canada (TSE:RY) (NYSE:RY), meanwhile, knocked it out of the park with its earnings report, as shares were up over 4.5% in Thursday morning’s trading.
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Several of Royal Bank of Canada’s reported metrics saw significant improvements over the year prior. It posted earnings of C$2.74 per diluted share, which was up from the C$2.60 per diluted share brought in this time last year. Adjusted earnings, meanwhile, came in at C$2.92, which not only blew away the C$2.65 in the previous year but also confidently exceeded analyst expectations of C$2.75.
Revenue, meanwhile, did even better at C$14.15 billion, up from the C$12.45 billion seen a year prior. The only thing that increased that wasn’t welcome was Royal Bank of Canada’s provision on bad loans, which was hiked from C$600 million this time last year to C$920 million this quarter.
Buybacks And Dividends
All that is terrific news, and Royal Bank of Canada isn’t too proud to spread the wealth accordingly. First, it raised its dividend to C$1.42 per share, up from C$1.38 previously. Not a big jump, especially for a quarterly payment, but any increase is a good increase, especially where dividends are concerned. Meanwhile, it also announced that it was going to buy back as many as 30 million outstanding shares, which should hike the value accordingly on the ones left in circulation. However, given the price surge seen today, that may already be priced in.
Is Royal Bank of Canada a Good Investment?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on RY stock based on five Buys and two Holds assigned in the past three months, as indicated by the graphic below. After a 26.86% rally in its share price over the past year, the average RY price target of C$147.86 per share implies 0.09% upside potential.
