Royal Bank (TSX:RY)(NYSE:RY) stock has dropped 3.5% over the past week as of close on February 26. This should come as no surprise to investors as the TSX Index has been throttled in the face of global fears over the coronavirus outbreak. When it comes to Royal Bank, should you be greedy while others are fearful?
Canada’s top bank released its first quarter 2020 results on February 21. The bank reported a first-quarter profit of $3.5 billion or $2.40 per share, compared to a profit of almost $3.2 billion or $2.15 per diluted share in Q1 2019.
This strong quarter was powered by record earnings in its capital markets segment. It also reported good growth in its personal and commercial banking operations. Royal Bank has emerged as a mortgage lending leader, and it should continue to benefit from the rebound in Canada housing.
There was more good news for Royal Bank shareholders to kick off earnings season. Royal Bank announced a 3% increase in its quarterly dividend to $1.08 per share. This now represents a 4.1% yield.
Royal Bank stock last possessed a favourable price-to-earnings ratio of 11 and a price-to-book value of 1.9. Its dip to start the week has the stock trending towards technically oversold territory, but its RSI of 35 has it just outside of this marker.
I like Royal Bank at its current price, but if it falls below the century mark the stock should be an auto-buy for all investors.
