Written by SmallCapPower.com
Royal Bank of Canada (TSX: RY) (NYSE:RY) is the largest bank in Canada and holds market-leading positions in its key business segments including Personal & Commercial Banking, Wealth Management and Insurance. Over the past several years, Royal Bank of Canada has delivered consistent earnings growth and solid ROE while maintaining a strong capital position with a disciplined approach to risk. Although the Bank appears fairly valued, investors looking for exposure to the Canadian and U.S. banking space could add this stock to their portfolio.
While the domestic market has been performing well of late and continues to drive the bank’s performance, future growth and profitability will likely come from the U.S. operations. Unlike the Canadian economy, which is highly sensitive to the price of commodities, the U.S. economy is large, stable and strong. Management believes its U.S. business will act as a huge tailwind in the long term for the Bank, and has put forth U.S. expansion initiatives, which will likely continue to grow the Company’s U.S. segment. As one of the world’s most highly-rated financial institutions, Royal Bank of Canada is committed to delivering excellent long-term returns to shareholders.
Investment Thesis
- Market leader with a focused-growth strategy
- Diversified business model with client-leading franchises; U.S. expansion initiatives to drive growth going forward
- Financial strength underpinned by prudent risk and cost management
- History of delivering value to its shareholders
Market leader with a focused-growth strategy
Royal Bank of Canada is a market leader across all its key businesses in Canada. Globally, the Company is one of the 15 largest global banks by market capitalization, with operations in 37 countries. Royal Bank of Canada currently serves over 16 million customers worldwide. The Company has a clear strategy for continued long-term growth in Canada, the U.S. and select global markets.
