ROYAL BANK OF CANADA $105 (Toronto symbol RY; Income-Growth Portfolio, Finance sector; Shares outstanding: 1.4 billion; Market cap: $147.0 billion; Dividend yield: 3.9%; Dividend Sustainability Rating: Highest; www.rbc.com) is Canada’s largest bank with assets of $1.38 trillion. Canada accounts for 62% of its revenue, followed by the U.S. (23%) and other countries (15%).

Starting with the May 2019 payment, the bank raised its quarterly dividend by 4.1%. Investors now receive $1.02 a share, up from $0.98. The new annual rate of $4.08 yields a high 3.9%.

In its fiscal 2019 second quarter, ended April 30, 2019, Royal earned $3.23 billion in the quarter. That’s up 5.6% from $3.06 billion a year earlier. Due to fewer shares outstanding, per-share earnings rose 6.8%, to $2.20 from $2.06. If you exclude unusual items, Royal earned $2.23 a share in the latest quarter.

Earnings from retail banking (48% of the total) rose 6.2%, mainly due to higher loan and deposit volumes. Rising interest rates also contributed to the increase. The bank’s capital markets business (24%) reported 16.7% higher earnings on rising bond and equity trading volumes. As well, earnings at the wealth management business (18%) gained 8.9% largely due to a 10.8% increase in assets under management.

However, earnings from insurance (5%) fell 10.5% on higher claims and lower returns from Royal’s investment portfolio. Earnings from investor and treasury services (5%) also declined 28.8%. That’s partly because the year-earlier results benefited from a gain on the sale of securities.

In the quarter, revenue improved 14.4%, to $11.5 billion from $10.1 billion. The bank set aside $426 million to cover potential bad loans, up 55.5% from $274 million a year earlier. The jump is largely due to extra provisions for two unnamed Canadian commercial clients.

Royal recently acquired Ontario-based WayPay, which specializes in cloud-based payment solutions. WayPay’s products allow businesses to improve and speed up the reconciliation and approvals process.

The stock trades at just 11.6 times the bank’s projected fiscal 2019 earnings of $9.07 a share.

Royal Bank is a buy.

INTACT FINANCIAL CORP. $124 (Toronto symbol IFC; High-Growth Dividend Payer Portfolio, Finance sector; Shares o/s: 139.2 million; Market cap: $17.3 billion; Dividend yield: 2.5%; Dividend Sustainability Rating: Above Average; www.intactfc.com) is Canada’s largest provider of property and casualty insurance. Its major brands are Intact Insurance, Canada BrokerLink and belairdirect.

In March 2019, Intact raised its quarterly dividend by 8.6%, to $0.76 from $0.70. The stock yields 2.5%.

For the quarter ended March 31, 2019, revenue rose 4.4%, to $2.66 billion from $2.54 billion a year earlier. That in part reflects Intact’s September 2017 acquisition of OneBeacon Insurance for $1.7 billion U.S.

Excluding one-time items, earnings per share fell 20.6%, to $0.54 from $0.68. That was because the company paid out higher claims as a result of severe winter weather throughout much of Canada.

The unusual weather is reflected in Intact’s combined ratio (claims paid out divided by premiums taken in—the lower, the better). In the latest quarter, it slipped to 101.5% from 99.2% a year earlier.

OneBeacon Group represent Intact’s entry into the U.S. market. That move, plus the size of the acquisition, adds risk. Still, the firm has been a great fit for Intact, which has successfully integrated other major acquisitions.

The stock trades at 18.7 times the forecast 2019 earnings of $6.64 a share.

Intact Financial is a buy.