RBC (RY) hikes dividend by 11%, National Bank's (NA) up 23%. Buy call?

Highlights 

  • On Wednesday, December 1, Royal Bank announced that it will increase its quarterly dividend by 11 per cent to C$ 1.2 per unit.
  • The National Bank has announced that it will increase its dividends by 23 per cent to C$ 0.87 per share.
  • Since the beginning of this year, RY stock has returned 20.8 per cent to the shareholders. Meanwhile, the NA stock surged 38.6 per cent year-to-date (YTD).

The Royal Bank of Canada (TSX:RY) and National Bank of Canada (TSX:NA) have announced to increase in the dividends paid to shareholders as the country's regulatory authorities have lifted the ban on increasing dividends.

On Wednesday, December 1, Royal Bank announced that it will increase its quarterly dividend by 11 per cent to C$ 1.2 per unit. In addition, the bank hopes to repurchase 45 million of its common shares and has applied for approval from the Office of the Superintendent of Financial Institutions (OSFI).

The largest bank in terms of market capitalization, Royal Bank's net income increased by 40 per cent year-over-year (YoY) to C$ 16.1 billion. Meanwhile, in the fourth quarter of this year, the bank's profit surged to C$ 3.89 billion, representing an increase of 20 per cent YoY.

Although the bank's profit in Q4 2021 increased, it missed beating the analysts' expectations. On an adjusted basis, Royal Bank's profit was C$ 2.71 per share, and the analysts had reportedly expected that the bank would earn C$ 2.81 per share.

Royal Bank and National Bank have increased dividends

© 2021 Kalkine Media Inc.

How did the National Bank (TSX:NA) perform?

One of the biggest banks in Canada, the National Bank has announced that it will increase its dividend by 23 per cent to C$ 0.87 per share. It is also looking to repurchase seven million of its common shares.

Also Read: 3 TSX dividend stocks to buy as the year-end approaches

The Montreal-based bank said that its net income increased to C$ 3.18 billion in 2021 in comparison to C$ 2.08 billion in 2020. In Q4 2021, the bank's profit surged by 58 per cent YoY to C$ 776 million.

The earnings were C$ 2.21 per share on an adjusted basis, and it was more than the analysts' expectation of C$ 2.19 apiece.

Bottom line

In Canada, stock market investors often prefer bank stocks as they have given returns to them over the years and are backed by strong fundamentals.

Since the beginning of this year, RY stock has returned 20.8 per cent to the shareholders. Meanwhile, the NA stock surged 38.6 per cent year-to-date (YTD).

Also Read: Scotiabank (TSX:BNS) hikes dividend as profit soars in 2021. Buy alert?

Comment


Disclaimer

   
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK