Fact based stock research
RBC (TSX:RY)
CA7800871021
How to read the free ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
RBC stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 48 (worse than 52% compared with investment alternatives), RBC (Diversified Banks, Canada) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of RBC are low in value (priced high) with a consolidated Value Rank of 26 (worse than 74% of alternatives). But they show above-average growth (Growth Rank of 65) and are safely financed (Safety Rank of 57, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 48, is a hold recommendation based on RBC's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company RBC exhibits low value (Obermatt Value Rank of 26), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 65). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 57) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
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360° Viewnew| Country | Canada |
| Industry | Diversified Banks |
| Index | TSX Composite |
| Size class | XX-Large |
14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.
Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.
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Review the performance ranks of the individual metrics that form each investment strategy.
Research History: RBC
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 17 |
|
53 |
|
30 |
|
26 |
|
| GROWTH | ||||||||
| GROWTH | 49 |
|
79 |
|
83 |
|
65 |
|
| SAFETY | ||||||||
| SAFETY | 88 |
|
29 |
|
23 |
|
57 |
|
| SENTIMENT | ||||||||
| SENTIMENT | n/a |
|
65 |
|
28 |
|
new |
|
| 360° VIEW | ||||||||
| 360° VIEW | n/a |
|
67 |
|
26 |
|
new |
|
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 48 (worse than 52% compared with investment alternatives), RBC (Diversified Banks, Canada) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of RBC are low in value (priced high) with a consolidated Value Rank of 26 (worse than 74% of alternatives). But they show above-average growth (Growth Rank of 65) and are safely financed (Safety Rank of 57, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 48, is a hold recommendation based on RBC's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company RBC exhibits low value (Obermatt Value Rank of 26), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 65). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 57) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 17 |
|
53 |
|
30 |
|
26 |
|
| GROWTH | ||||||||
| GROWTH | 49 |
|
79 |
|
83 |
|
65 |
|
| SAFETY | ||||||||
| SAFETY | 88 |
|
29 |
|
23 |
|
57 |
|
| COMBINED | ||||||||
| COMBINED | 61 |
|
53 |
|
36 |
|
48 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 26 (worse than 74% compared with alternatives), RBC shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for RBC. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 63% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 32 which means that the stock price compared with what market professionals expect for future profits is higher than 68% of comparable companies, indicating a low value concerning RBC's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 49 which means that the stock price compared with what market professionals expect for future profit levels is higher than 51% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 11 is also low. Compared with invested capital, the stock price is higher than for 89% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 26, is a hold recommendation based on RBC's stock price compared with the company's operational size and dividend yields. Should dividend investors pick RBC? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose RBC only if they reasonably expect the low current profit levels to be transitory. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more
| VALUE METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| PRICE VS. REVENUES (P/S) | ||||||||
| PRICE VS. REVENUES (P/S) | 21 |
|
50 |
|
38 |
|
32 |
|
| PRICE VS. PROFITS (P/E) | ||||||||
| PRICE VS. PROFITS (P/E) | 30 |
|
73 |
|
49 |
|
49 |
|
| PRICE VS. CAPITAL (Market-to-Book) | ||||||||
| PRICE VS. CAPITAL (Market-to-Book) | 6 |
|
9 |
|
13 |
|
11 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 54 |
|
83 |
|
80 |
|
63 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 17 |
|
53 |
|
30 |
|
26 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 65 (better than 65% compared with alternatives), RBC shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for RBC. Sales Growth has a rank of 70, which means that, currently, professionals expect the company to grow more than 70% of its competitors. Profit Growth with a rank of 83 is also above average. But Capital Growth has only a rank of 15, and Stock Returns with 41 are also below-average. Stock returns for RBC have recently been below 59% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 65, is a buy recommendation for growth and momentum investors. Are investors forecasting troubles based on the lack of operating investment activity at the company? This could be one explanation as to why stock returns are low. But stock returns can also be the result of correcting an error in the past, in this case, an overly optimistic outlook on the future, which is now more realistic. The Value Ranks may confirm such a picture. The more important growth indicators are revenues and profits, which are both above average for RBC. This is a positive sign from the company's operational side and may give investors courage, despite the poor recent stock price performance. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with the Obermatt Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more
| GROWTH METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 49 |
|
62 |
|
85 |
|
70 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 31 |
|
10 |
|
60 |
|
83 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
99 |
|
57 |
|
15 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 52 |
|
69 |
|
79 |
|
41 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 49 |
|
79 |
|
83 |
|
65 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 57 (better than 57% compared with alternatives), the company RBC has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of RBC is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for RBC. Refinancing is at 95, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 95% of its competitors. Liquidity is also good at 60, meaning the company generates more profit to service its debt than 60% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 6, which means the company has an above-average debt-to-equity ratio. It has more debt than 94% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 57 (better than 57% compared with alternatives), RBC has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and RBC could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with RBC and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more
| SAFETY METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 82 |
|
6 |
|
8 |
|
6 |
|
| REFINANCING | ||||||||
| REFINANCING | 56 |
|
38 |
|
46 |
|
95 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 83 |
|
82 |
|
65 |
|
60 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 88 |
|
29 |
|
23 |
|
57 |
|
Sentiment Metrics in Detail
| SENTIMENT | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| ANALYST OPINIONS | ||||||||
| ANALYST OPINIONS | n/a |
|
37 |
|
69 |
|
new |
|
| OPINIONS CHANGE | ||||||||
| OPINIONS CHANGE | n/a |
|
37 |
|
6 |
|
new |
|
| PRO HOLDINGS | ||||||||
| PRO HOLDINGS | n/a |
|
65 |
|
22 |
|
new |
|
| MARKET PULSE | ||||||||
| MARKET PULSE | n/a |
|
52 |
|
45 |
|
new |
|
| CONSOLIDATED RANK: SENTIMENT | ||||||||
| CONSOLIDATED RANK: SENTIMENT | n/a |
|
65 |
|
28 |
|
new |
|
Free stock analysis by the purely fact based Obermatt Method for RBC from November 14, 2024.
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