Royal Bank (TSX:RY)(NYSE:RY) is the largest financial institution in Canada. Its shares have climbed 20% in 2021 as of close on July 28. The stock is up 36% from the prior year.
Today, I want to discuss whether Canada’s top bank is still worth adding in late July and early August. Investors have been able to see the fruits of its first-half results. In Q2 2021, net income shot up $2.5 billion from the prior year to $4.0 billion. Meanwhile, diluted earnings per share climbed $1.00 to $2.76.
Royal Bank and its peers have benefited from loose monetary policy and a rebounding economy. Its Personal and Commercial Banking segment saw net income rise to $1.90 billion – up $1.37 billion in the previous year. That earnings growth was powered by lower provisions for credit losses (PCL) and improved average volume growth with double-digit percentage growth in deposits and 6% growth in loans.
The bank’s Wealth Management segment delivered growth of 63% to $691 million. This was mostly due to average loan growth and higher average fee-based client assets. Meanwhile, its Insurance, Treasury & Investor Services, and Capital Markets segments all delivered good to great growth.
Canada’s vaccine rollout kicked into high gear in the late spring and summer months. The economic rebound is well underway, and the country’s top financial institutions are poised to benefit. Shares of Royal Bank still possess a favourable price-to-earnings ratio of 12.
Moreover, it offers a quarterly dividend of $1.08 per share. That represents a 3.4% yield.