Strong earnings lead to dividend hike

Article Excerpt

ROYAL BANK OF CANADA $54 (Toronto symbol RY; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.4 billion; Market cap: $75.6 billion; Price-to-sales ratio: 2.1; Dividend yield: 4.0%; TSINetwork Rating: Above Average; www.rbc.com) earned $1.5 billion, or $1.00 a share, in its 2011 second quarter, which ended April 30, 2011. That’s up 13.3% from $1.3 billion, or $0.88 a share, a year earlier. Revenue rose 2.4%, to $7.1 billion from $7.0 billion. The quality of the bank’s loan portfolio continues to improve. It cut its loan-loss provisions by 31.7% in the latest quarter, to $344 million from $504 million. Royal also saw strong earnings gains at its wealth management (up 144.4%), insurance (up 36.4%) and Canadian banking (up 15.6%) divisions. Royal also raised its quarterly dividend by 8.0%, to $0.54 a share from $0.50. The new annual rate of $2.16 yields 4.0%. Royal Bank is a buy. buy…