Royal Bank of Canada (RY)
Financial Services · NYQ · US
Fundamentals
Valuation and ratings
Royal Bank of Canada trades at USD216.07, which is 96% below the USD423.50 our discounted cash flow model puts on the business. On that measure alone it screens as undervalued, though a DCF is an argument rather than a measurement, and the market is frequently right about why something is cheap.
Our moat model scores it 61 out of 100, which is a moat, but not a deep one. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 19.5 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Royal Bank of Canada
Royal Bank of Canada operates as a diversified financial service company worldwide. Its Personal Banking segment offers home equity financing, personal lending, chequing and savings accounts, private banking, auto financing, mutual funds, GICs, credit cards, and payment products and solutions. The company's Commercial Banking segments provides lending, deposit and transaction banking products and services. Its Wealth Management segment provides a suite of wealth, investment, trust, banking, credit, and other solutions to clients; asset management products to institutional and individual clients; and asset and investor services to financial institutions, asset managers, and asset owners. The company's Insurance segment offers life, health, travel, wealth, annuities, property and casualty, and reinsurance advice and solutions; digital platforms; and independent brokers and partners, as well as client-led advice and solutions. The company's Capital Markets segment offers advisory and origination, sales and trading, lending and financing, and transaction banking services to corporations, institutional clients, asset managers, private equity firms, and governments. The company was founded in 1864 and is based in Toronto, Canada.
RY passes 6 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Smart money ownership
10 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- Ken Fisher, Fisher Asset Management, LLC$1.09B · 0.4% of book
- Two Sigma, TWO SIGMA INVESTMENTS, LP$118.36M · 0.1% of book
- Cliff Asness, AQR CAPITAL MANAGEMENT LLC$110.37M · 0.1% of book
- Israel Englander, MILLENNIUM MANAGEMENT LLC$95.31M · 0.0% of book
- Burgundy Asset Management, Burgundy Asset Management Ltd.$92.82M · 0.9% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is Royal Bank of Canada (RY) undervalued?
Against our discounted cash flow estimate of USD423.50, RY at USD216.07 is 96% below fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own RY?
10 of the institutions we track reported a position in RY in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is RY's P/E ratio?
RY trades at 19.5 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
The full research page for RY, with financial statements, ownership detail, peer comparison and alerts, is free inside the app.
Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.