Canada’s banking sector is acknowledged broadly because the bedrock of stability. Particularly, the greater than 100-year dividend observe document of the Massive 5 banks confirms their monetary stability.
The biggest of all of them, the Royal Financial institution of Canada (TSX:RY), can be TSX’s high large-cap inventory by market capitalization. This $282.4 billion lender was established in 1864 and began paying dividends six years later.
Given its dividend consistency and longevity, risk-averse traders can belief this Canadian dividend inventory for the subsequent 20 years, if not for for much longer. The present share worth is $201.02, whereas the dividend yield is 3.1%.
Nice dividend-payer
Dividend security is the hallmark of a fantastic dividend-payer. Weaker banks would have collapsed through the World Wars and monetary crises. RBC’s property in World Conflict II even grew considerably after shifting its asset allocation from loans to federal authorities securities. Regardless of the transfer, the financial institution maintained its lending functionality.
Canada’s strict banking rules helped RBC and its trade friends emerge unscathed after the 2008 monetary disaster. The worldwide pandemic in 2020 affected many monetary establishments however had minimal affect on Canadian Massive Banks, together with RBC.
When the monetary regulator lifted the restrictions on dividend will increase in late 2021, RBC introduced an 11% hike in payouts. Its President and CEO, Dave McKay, mentioned a robust steadiness sheet, diversified enterprise mannequin, and prudent danger administration outlined RBC’s success through the COVID-19 atmosphere.
Tariff conflict
Credit score stress is a significant difficulty in 2025 after the U.S. initiated a tariff conflict with Canada and different buying and selling companions. It was one other check of the resilience and capital power throughout the banking sector. RBC raised its provision for credit score losses by 54% to $1.4 billion in Q2 fiscal 2025 versus Q2 fiscal 2024. Nonetheless, web revenue rose 11% year-over-year to $4.4 billion.
Quick-forward to Q3 fiscal 2025, and RBC beat earnings expectations and delivered spectacular outcomes. Within the three months ending July 31, 2025, web revenue elevated 21% year-over-year to $5.4 billion, a brand new document. All enterprise segments reported robust progress.
In response to McKay, the 13.2% Widespread Fairness Tier 1 (CET1) signifies a sturdy capital place that ought to assist stable quantity progress. He added that the acquisition of HSBC Canada in September 2024 is a catalyst for accelerated progress.
Fitch Rankings has a steady outlook (AA-) for RY. The worldwide credit score scores company believes the enormous lender enjoys superior economies of scale and has an entrenched buyer deposit base. It has a diversified enterprise mannequin, with robust wealth administration and capital markets footprints within the U.S. and Europe.
No different anchor
The Royal Financial institution of Canada deserves to be an anchor inventory for the overwhelming majority of long-term traders. You could have a well-managed monetary establishment with a prolonged dividend observe document. Moreover, Canada’s largest financial institution has a celebrated historical past. It has achieved a “too massive to fail” standing and held the “throne” on the TSX for years.
