Royal Bank Of Canada (NYSE: RY)

Sector: Financial Services Industry: Banks - Diversified CIK: 0001000275
Market Cap 244.65 Bn
P/B 2.46
P/E 16.82
P/S 5.14
ROIC (Qtr) 21.87
Div Yield % 0.00
Rev 1y % (Qtr) 12.53
Total Debt (Qtr) 9.97 Bn
Debt/Equity (Qtr) 0.10
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About

Investment thesis

Bull case

  • Strong operating cash flow of 39.44B provides robust 3.96x coverage of total debt 9.97B, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 1641.57B provides 164.62x coverage of total debt 9.97B, indicating robust asset backing and low credit risk.
  • Operating cash flow of 39.44B provides exceptional 7888.57x coverage of minority interest expenses 5M, showing strong core operations.
  • Robust free cash flow of 37.84B exceeds capital expenditure of 1.60B by 23.62x, indicating strong organic growth funding capability.
  • Strong operating cash flow of 39.44B provides 1.77x coverage of SG&A expenses 22.33B, showing efficient operational cost management.

Bear case

  • Operating cash flow of 39.44B barely covers its investment activities of (48.98B), with a coverage ratio of -0.81, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 39.44B provides thin coverage of dividend payments of (6.29B) with a -6.28 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Operating cash flow of 39.44B is outpaced by equity issuance of (1.95B) (-20.27 ratio), indicating concerning reliance on equity markets for funding operations.
  • R&D investment of 0 represents just 0x of SG&A expenses of 22.33B, indicating potential underinvestment in innovation relative to administrative overhead.
  • Deposit liabilities of 1082.58B significantly exceed cash reserves of 62.42B, which is 17.34x, indicating potential liquidity risk in stress scenarios.

Segments [axis] Breakdown of Revenue (2025)

Segments [axis] Breakdown of Revenue (2025)

Peer comparison

Companies in the Banks - Diversified
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 JPM Jpmorgan Chase & Co 1,043.32 Bn 33.97 9.59 942.38 Bn
2 BAC Bank Of America Corp /De/ 532.79 Bn 28.35 6.13 708.27 Bn
3 WFC Wells Fargo & Company/Mn 446.49 Bn 124.86 10.43 408.42 Bn
4 C Citigroup Inc 376.35 Bn 51.48 4.87 720.33 Bn
5 RY Royal Bank Of Canada 244.65 Bn 16.82 5.14 9.97 Bn
6 TD Toronto Dominion Bank 165.03 Bn 11.57 3.41 7.67 Bn
7 BK Bank of New York Mellon Corp 143.13 Bn 63.87 9.95 51.52 Bn
8 BMO Bank Of Montreal /Can/ 107.49 Bn 17.28 4.15 179.01 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.08 0.22
EV to Cash from Ops. EV/CFO 3.48 241.80
EV to Debt EV to Debt 13.76 2.53
EV to EBIT EV/EBIT 7.49 33.73
EV to EBITDA EV/EBITDA 6.14 25.98
EV to Free Cash Flow [EV/FCF] EV/FCF 3.63 245.05
EV to Market Cap EV to Market Cap 0.56 1.98
EV to Revenue EV/Rev 2.88 9.02
Price to Book Value [P/B] P/B 2.46 3.87
Price to Earnings [P/E] P/E 16.82 33.57
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.65 2.37
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 29.28
Dividend per Basic Share Div per Share (Qtr) 0.00 2.04
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 15.72
Interest Coverage Interest Coverage 0.00 0.00
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 3.03 -5.81
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -29.82 -8.06
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 -10.21
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 23.67 32.26
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 26.14 22.90
EBIT Growth (1y) % EBIT 1y % (Qtr) 27.33 30.58
EBT Growth (1y) % EBT 1y % (Qtr) 27.33 30.58
EPS Growth (1y) % EPS 1y % (Qtr) 23.32 38.83
FCF Growth (1y) % FCF 1y % (Qtr) 150.35 235.05
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 14.49 9.67
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.02 0.03
Cash Payout Ratio Cash Payout (Qtr) 0.15 0.17
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.00
Debt to Equity Ratio Debt/Equity (Qtr) 0.10 3.24
Interest Cover Ratio Interest Cover Ratio 0.00 0.00
Times Interest Earned Times Interest Earned 0.00 0.00
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 40.40 38.15
EBIT Margin % EBIT Margin % (Qtr) 53.90 38.03
EBT Margin % EBT Margin % (Qtr) 38.50 33.01
Gross Margin % Gross Margin % (Qtr) 100.00 98.96
Net Profit Margin % Net Margin % (Qtr) 30.60 26.44