The buy-and-hold strategy is customary for long-term buyers within the inventory market. Though diversification is very beneficial to mitigate danger, an funding portfolio wants a core holding. Nevertheless, this anchor inventory should possess sure traits that align with the funding technique.
On the Toronto Inventory Change, Royal Financial institution of Canada (TSX:RY) is a high-conviction “eternally inventory” for 5 key causes.
Established lender
The financial institution was established in 1864 because the Retailers Financial institution of Halifax. It grew to become a public firm in 1869 with an preliminary capital of $300,000. After being renamed the Royal Financial institution of Canada in 1901, the financial institution skilled speedy development till 1930, aided by a profitable acquisition technique.
In 1929, RBC grew to become the primary Canadian financial institution to exceed $1 billion in property. Notably, the financial institution survived the inventory market crash in the identical 12 months. Important development occurred within the Nineteen Sixties when administration targeted on shopper lending.
Dimension and scale
Right now, RBC is the most important publicly listed Canadian firm by market capitalization. The $289.2 billion monetary establishment has the dimensions and scale to resist financial uncertainty. Its diversified enterprise mannequin consists of 5 segments, all of which get pleasure from market-leading positions.
The financial institution emblem, that includes the letters RBC and the modernized Leo the lion image, displays the unification of its numerous enterprise platforms below one model. It additionally signifies an increasing worldwide presence. The US is RBC’s second dwelling market, and it operates in 27 different international locations.
Based on the Workplace of the Superintendent of Monetary Establishments (OSFI), Canadian monetary establishments “stay well-positioned to navigate the danger setting and have demonstrated sturdy monetary resilience and downturn preparedness.
Bedrock of stability
Canada’s banking sector is thought worldwide as a bedrock of stability. The Massive 5 financial institution shares, particularly, are staples in a Canadian investor’s inventory portfolio. Like its friends within the elite circle, RBC has paid dividends for greater than a century, a monitor file spanning 155 years.
As of this writing, RBC’s share worth is $201.20 with a year-to-date acquire of 19.2%. The dividend yield is 3.1%. Given its prolonged cost historical past, the quarterly dividends are probably reliable. It’s like receiving a gradual, pension-like earnings.
Monetary energy
RBC’s monetary well being and steadiness sheet stay sturdy. In Q3 fiscal 2025 (three months ending July 31, 2025), internet earnings elevated 20% to $5.4 billion in comparison with Q3 fiscal 2024. Nevertheless, the availability for credit score losses (PCL) rose 34% year-over-year to $881 million.
Nonetheless, Graeme Hepworth, Chief Threat Officer of RBC, stated, “As all the time, we proceed to proactively handle danger by way of the cycle, and we stay nicely capitalized to resist a broad vary of macroeconomics and geopolitical outcomes.”
Tech-oriented
RBC ranked third for synthetic intelligence (AI) maturity primarily based on the 2025 Evident AI Index. It’s additionally the one Canadian financial institution within the prime 10 out of fifty international monetary establishments.
Based on President and CEO Dave McKay, the rating is proof of the financial institution’s decade-long funding in AI and unwavering dedication to innovation. Some analysts say RBC is pondering like a tech firm.
Stand-alone or anchor
Because the TSX’s prime financial institution, RBC offers each recurring passive earnings and potential for capital development. It really works nicely as a stand-alone funding or as an anchor in a diversified inventory portfolio.
