Royal Bank of Canada
🇨🇦 RY.TO · Toronto · CA7800871021
Bank
CAD 227.34 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
15.8
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 227.34 ÷ 14.42 = 15.8
TTM period through: 2026-01-31
Forward P/E (estimated): 14.2
Based on analyst estimates
Reference: Provider P/E (Trailing): 15.6
Yield (Fwd)
2.89%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 2.73%
Net Debt/EBITDA (TTM)
11.0x
Latest quarter: 41.3x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2026-01-31
Latest quarter (2026-01-31): 41.3x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
45.5%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 43.2%
Cash Flow Payout (TTM): 15.9%
FCF Coverage (TTM): 6.02x
ROE
15.4%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
Summary
Royal Bank of Canada is a premier financial institution operating within the highly protected Canadian banking oligopoly, delivering exceptional ROE and reliable long-term growth. While the bank's operational quality is outstanding and its dividend is deeply secure, the current 15.8x P/E valuation and 2.73% yield offer limited upside for new capital. Existing shareholders should maintain positions given the pristine fundamentals, but new investors may want to wait for a broader market pullback to provide a more attractive entry point.
Sector Context
Royal Bank of Canada is Canada's largest bank, generating revenue through personal and commercial banking, wealth management, and capital markets services globally. In the banking sector, high Debt/Equity ratios (RBC is currently at 2.59x) are standard as customer deposits are legally classified as liabilities; instead, investors should focus on Return on Equity (ROE), where the bank's 15.4% marks exceptional efficiency.
📊 Strategy Analysis
- • Exceptional business quality with a 15.4% ROE, operating as a dominant player within the highly protected Canadian banking oligopoly.
- • Highly secure dividend with a conservative 41.9% trailing payout ratio and robust free cash flow coverage of 6.0x.
- • Strong fundamental growth trajectory, having grown revenue by 269% over the past decade alongside consistent profitability.
⚠ What to Watch
- • Current trailing dividend yield of 2.73% falls below the strategy's strict 3.0% minimum requirement for new capital allocation.
- • Valuation at 15.76x TTM P/E sits above the preferred 8-15x range for traditional commercial banks.
- • Stock is trading near historical highs (recently breaking above its 200-day moving average), leaving limited margin of safety for new buyers.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-05
Disclaimer: This information is for educational purposes only. Not financial advice.