Canada’s Big Six banks are getting set for the third earnings season for 2022. Today, I want to preview
the results for Canada’s largest bank and the largest stock on the TSX by market cap; Royal Bank
(TSX:RY)(NYSE:RY). Is it worth snatching up ahead of the reveal? Let’s find out.
Shares of Royal Bank have dropped 6.7% in 2022 as of close on August 22. The stock is down 3.1% in the
year-over-year period. Royal Bank has tracked with its peers in this space as the broader TSX has been
hit with volatility since the spring season. There is a great deal of uncertainty in the financial space as
the Bank of Canada (BoC) pursues an aggressive rate tightening strategy to combat inflation.
The bank is set to release its third quarter fiscal 2022 earnings on Wednesday, August 24. In Q2 2022,
Royal Bank posted a solid quarter but there were signs of a slowdown. Net income climbed 6% year-
over-year to $4.3 billion. Meanwhile, diluted earnings per share (EPS) jumped 7% to $2.96.
Royal Bank’s Personal and Commercial Banking sector delivered net income growth of 17% to $2.23
billion. Meanwhile, its Wealth Management sector posted 10% growth to $750 million. Net income in
Insurance also rose 10% to $206 million.
Analysts and experts have warned of a recession on the horizon. Even so, I’m still looking to snatch up
this dependable profit machine on the dip. Royal Bank possesses a favourable price-to-earnings ratio of
11. Moreover, it offers a quarterly dividend of $1.28 per share. That represents a solid 4% yield.
