Royal Bank (TSX:RY)(NYSE:RY) is Canada’s largest bank by market cap.
Its stock has put together a terrific 2019, but the release of its fourth quarter and full-year results for the year have sparked a slight retreat.
Should investors be worried? Or, is this a good time to buy on the dip?
Shares of Royal Bank have dropped 3.4% over the past week as of close on December 9. The bank released its fourth quarter and full-year results for 2019 on December 4.
It achieved record earnings of $12.9 billion this fiscal year, but it suffered from some setbacks in the final quarter. Earnings fell 1% year-over-year in Q4 2019 to $3.20 billion. This was primarily due to lower results in its Investor & Treasury Services, Capital Markets, and Insurance and Corporate Support segments.
The bank still reported net income of $1.61 billion in its Personal and Commercial Banking segment in the fourth quarter. This was up 5% from Q4 2018. The rise in earnings were powered by average volume growth of 6% in loans and 10% in deposits.
Royal Bank has emerged as a mortgage lending leader in an improved housing environment. Canada’s housing market is expected to continue to show signs of improved health in 2020.
Royal Bank stock possessed a price-to-earnings ratio of 11.9 at the time of this writing, and a price-to-book value of 1.9. This puts it in the pricier range compared to its peers, even after the dip. However, its stock last had an RSI of 26, putting it in technically oversold territory.
I like Royal Bank for the long-term, so I’m looking to add after this dip.
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