This Dividend Stock Deserves ‘Royal’ Treatment

• Royal Bank of Canada (RY) is Canada’s largest bank, showing strong technical momentum.
• RY has gained 34% over the past year and made 17 new highs in the past month.
• Consensus analyst ratings are overwhelmingly positive, with multiple “Strong Buy” opinions and price targets up to $269.
• Revenue and earnings are projected to grow steadily in 2024 and 2025, but Morningstar cautions RY is 35% overvalued after its recent run.

Today’s Featured Stock

Valued at $234 billion, Royal Bank of Canada (RY) operates under the master brand name of RBC. It is Canada’s largest bank as measured by assets and market capitalization, and one of North America’s leading diversified financial services companies. 

It provides personal and commercial banking, wealth management services, insurance, corporate and investment banking, and transaction processing services on a global basis. 

What I’m Watching

I found today’s Chart of the Day by using Barchart’s powerful screening functions to sort for stocks with the highest technical buy signals; superior current momentum in both strength and direction; and a Trend Seeker “buy” signal. I then used Barchart’s Flipcharts feature to review the charts for consistent price appreciation. RY checks those boxes. Since the Trend Seeker signaled a new “Buy” on Oct. 23, the stock has gained 13.36%.

Barchart Technical Indicators for Royal Bank of Canada

Editor’s Note: The technical indicators below are updated live during the session every 20 minutes and can therefore change each day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com website when you read this report. These technical indicators form the Barchart Opinion on a particular stock.

Royal Bank of Canada hit an all-time high of $167.91 on Dec. 12.

• RY has a Weighted Alpha of +46.13.
• Royal Bank of Canada has a 100% “Buy” opinion from Barchart.
• The stock gained 34.37% over the past year.
• RY has its Trend Seeker “Buy” signal intact.
• The stock recently traded at $166.73 with a 50-day moving average of $150.86.
• Royal Bank of Canada made 17 new highs and gained 14.06% in the last month.
• Relative Strength Index (RSI) is at 78.78.
• There’s a technical support level around $165.88.

Don’t Forget the Fundamentals

• $234 billion market capitalization.
• 16.1x trailing price-earnings ratio.
• 2.85% Dividend yield
• Revenue is projected to grow 4.71% this year and another 4.93% next year.
• Earnings are estimated to increase 8.37% this year and an additional 9.76% next year.

Analysts and Investor Sentiment on Royal Bank of Canada

It looks like Wall Street and individual investors like this stock.

• The Wall Street analysts tracked by Barchart have given 10 “Strong Buy,” 2 “Moderate Buy” and 3 “Hold” opinions on the stock with price targets between $152 and $176.
• Value Line rates it “Average” with price targets between $203 and $269.
• CFRA’s MarketScope Advisor rates it a “Strong Buy” with a price target of $200.
• Morningstar thinks with the stock’s recent runup, it’s 35% overvalued.
• 1,342 investors following the stock on Motley Fool think it will beat the market, while 133 think it won't.
• 62,520 investors are monitoring the stock on Seeking Alpha, which rates it a “Strong Buy.”

The Bottom Line on Royal Bank of Canada

RBC is well diversified and financially stable with solid projections of increased revenue and earnings. 

Today’s Chart of the Day was written by Jim Van Meerten. Read previous editions of the daily newsletter here.

Additional disclosure: The Barchart Chart of the Day highlights stocks that are experiencing exceptional current price appreciation. They are not intended to be buy recommendations as these stocks are extremely volatile and speculative. Should you decide to add one of these stocks to your investment portfolio it is highly suggested you follow a predetermined diversification and moving stop loss discipline that is consistent with your personal investment risk tolerance.