Royal Bank of Canada
Royal Bank of Canada Fundamental Analysis
Royal Bank of Canada (RY) shows moderate financial fundamentals with a PE ratio of 16.28, profit margin of 14.82%, and ROE of 15.08%. The company generates $137.1B in annual revenue with weak year-over-year growth of 1.51%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 61.9/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze RY's fundamental strength across five key dimensions:
Efficiency Score
WeakRY struggles to generate sufficient returns from assets.
Valuation Score
ExcellentRY trades at attractive valuation levels.
Growth Score
WeakRY faces weak or negative growth trends.
Financial Health Score
WeakRY carries high financial risk with limited liquidity.
Profitability Score
ModerateRY maintains healthy but balanced margins.
Key Financial Metrics
Is RY Expensive or Cheap?
P/E Ratio
RY trades at 16.28 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, RY's PEG of 1.72 indicates fair valuation.
Price to Book
The market values Royal Bank of Canada at 2.38 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at -14.50 times EBITDA. This is generally considered low.
How Well Does RY Make Money?
Net Profit Margin
For every $100 in sales, Royal Bank of Canada keeps $14.82 as profit after all expenses.
Operating Margin
Core operations generate 18.67 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $15.08 in profit for every $100 of shareholder equity.
ROA
Royal Bank of Canada generates $0.88 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Royal Bank of Canada generates strong operating cash flow of $55.13B, reflecting robust business health.
Free Cash Flow
Royal Bank of Canada generates strong free cash flow of $52.89B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $37.64 in free cash annually.
FCF Yield
RY converts 16.01% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
16.28
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.72
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.38
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.41
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
6.003
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.13
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.15
vs 25 benchmark
ROA
Return on assets percentage
0.009
vs 25 benchmark
ROCE
Return on capital employed
0.03
vs 25 benchmark
How RY Stacks Against Its Sector Peers
| Metric | RY Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 16.28 | 18.86 | Better (Cheaper) |
| ROE | 15.08% | 847.00% | Weak |
| Net Margin | 14.82% | 4202.00% | Weak |
| Debt/Equity | 6.00 | 0.91 | Weak (High Leverage) |
| Current Ratio | 0.13 | 667.17 | Weak Liquidity |
| ROA | 0.88% | -21543.00% (disorted) | Weak |
RY outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Royal Bank of Canada's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
197.10%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
28.04%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
64.57%
Industry Style: Value, Dividend, Cyclical
High Growth