Royal Bank Of Canada (TSX:RY) & Bank Of Montreal: 2 Bluechip Stocks To Punt On

Summary

  • The pandemic-led market volatility has forced the banking sector to adopt digital solutions, allowing it to sustain performance.
  • Royal Bank of Canada Capital Markets has announced the launch of electronic trading platform Aiden®.
  • Since the pandemic-led market collapse in March, the Royal Bank of Canada has regained 33.27 per cent.
  • Bank of Montreal has rebounded 49 per cent since the pandemic-led market crash on March 20.

 

The Canadian economy is likely to decline by 7.1 per cent in 2020, according to the latest International Monetary Fund (IMF) outlook report. Bank of Canada’s latest Business Outlook Survey indicates that the business sentiment is grim across industries and sectors due to the impact of the Covid-19 pandemic. Despite the gloomy outlook, Canadian banks such as the Bank of Montreal (TSX: BMO) and the Royal Bank of Canada (TSX: RY) have survived the COVID-19-led market collapse and are witnessing a gradual recovery.

The sector has accelerated digitalization after the stringent containment measures enforced in the country, forcing its staff and customers to operate from home. The pandemic-caused market volatility has also led the sector to adapt to newer technology solutions, allowing it to sustain performance.

Let us look at the two bluechip banking stocks: Bank of Montreal (TSX: BMO) and Royal Bank of Canada (TSX: RY).

 

Royal Bank of Canada (TSX:RY)

Current Stock Price: C$ 96.29

 

As businesses across Canada begun re-opening, the banks are trying to rally their customers' support to help accelerate the recovery of local businesses. In the wake of this development, the Royal Bank of Canada launched the Canada United movement in association with several corporate brands and other national associations. The initiative, meant to generate more customer engagement among towards small businesses, raised over C$14 million including C$12-million support from Federal Government.

It has also launched a Rewards Points program by giving customers exclusive value and will likely continue to advance this initiative by building on unique travel, dining, and shopping deals.

The bank is using technological strategies to boost its operations. Royal Bank of Canada Capital Markets has already announced the launch of artificial intelligence-powered Aiden®, an electronic trading platform.

Royal Bank of Canada stock is down over 6.28 per cent value year-to-date (YTD). Since the pandemic-led market collapse on March 24, the stocks have regained 33.27 per cent. In the last six months, RCB stocks have increased by almost 15.73 per cent.

This bank has a current market capitalization of C$ 137.08 billion. The bank will pay out a quarterly dividend of C$ 1.08 on November 24, 2020. The bank has a current dividend yield of 4.486 per cent.

The bank stock’s price-to-earnings (P/E) ratio is 12.30. The BMO stock provides a return on equity (RoE) of 13.77 per cent and return on assets of 0.69 per cent. The profit-to-book (P/B ratio) is 1.737, and its present earnings per share (EPS) is 7.80, as per the TMX data.

Royal Bank of Canada ranks among TMX Money’s top financial services with the most price gains in the last 30 days on the TSX and the TSXV. The banking stock has a 10-day average volume of 5.83 million and trending among the Toronto Stock Exchange (TSX) and TSX Venture (TSXV) stocks with the largest trade volumes in the last 10 days.

In the third quarter of 2020, RCB posted a net income of C$3.2 billion, a decline of nearly 2 per cent compared to the same quarter of the last fiscal year. Its earnings per share was C$5.60, a plunge of 15 per cent YoY.

 

Bank of Montreal (TSX: BMO)
Current Stock Price: 84.09

 

Bank of Montreal’s stock is down over 16.44 per cent value year-to-date (YTD). Since the pandemic-led market crash on March 20, the stocks have rebounded 49 per cent. In the last three months, BMO stocks have increased by almost 14 per cent.

This bank has a current market capitalization of C$ 54.3 billion. The bank will pay out a quarterly dividend of C$ 1.06 on November 26, 2020. The bank has a current dividend yield of 5.042 per cent.

The bank stock’s profit-to-earnings (P/E) ratio is 11.90. The BMO stock provides a return on equity (RoE) of 9.08 per cent and return on assets of 0.47 per cent. The profit-to-book (P/B ratio) is 1.098, and its present earnings per share (EPS) is 7.06, as per TMX data.

The Bank of Montreal recently launched a nationwide digital solution that allows home buyers to apply for a mortgage pre-approval online and receive an instant decision, thereby expediting the entire process.

The lender ranks among TMX Money’s top price performer stocks on the TSX and TSXV that have posted the largest price gains in the last 30 days. The bank has also been placed on the top financial services with the largest price gains in the last 30 days on the TSX and the TSXV. The bank has a 10-day average volume of 3.18 million and trending among the TSX and TSX stocks with the largest trade volumes in the past 10 days.

In the third quarter of 2020, the bank posted a net income of C$ 1232 million, a dip of nearly 20.9 per cent compared with C$ 1557 million in the same quarter of the last fiscal year. Its earnings per share was C$ 1.81, a dip of 22.6 per cent compared with C$ 2.34 in Q3. The net revenue was C$ 7,189 million, nearly 165 per cent down from C$ 19,200 in the last fiscal year.

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