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4-Star Stocks Poised to Pop: Royal Bank of Canada

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Based on the aggregated intelligence of 165,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Canadian banking giant Royal Bank of Canada (NYSE: RY  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Royal Bank's business and see what CAPS investors are saying about the stock right now.

Royal Bank facts

Headquarters (Founded)

Toronto, Canada (1864)

Market Cap

$73.9 billion

Industry

Diversified banks

Trailing-12-Month Revenue

$25.8 billion

Management

CEO Gordon Nixon (since 2001)
CFO Janice Fukakusa (since 2004)

Return on Equity (Average, Past 3 Years)

16.7%

Dividend Yield

3.7%

Competitors

Toronto-Dominion Bank (NYSE: TD  )
Bank of Nova Scotia (NYSE: BNS  )
Bank of Montreal
Canadian Imperial Bank of Commerce (CIBC)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 93% of the 573 members who have rated Royal Bank believe the stock will outperform the S&P 500 going forward. These bulls include neochu and simonhs.

Just a few months ago, neochu tapped Royal Bank as a refreshingly bankable bet:

Like most of the Canadian owned institutions the minimum reserve requirements as well as the lower exposure levels to toxic debt has kept it largely out of the mess currently seen in the sector. With the recent investment expansions into the US and international investment markets profits should continue on its current level.

In terms of total assets, Royal Bank is, in fact, the biggest of Canada's much-heralded "Big Five" banks. While the rest of the bunch (TD Bank, Bank of Nova Scotia, Bank of Montreal, and CIBC) are also highly regarded in our community, Fools are most bullish about Royal Bank for its sheer size. Specifically, Royal Bank's unmatched network of more than 1,100 branches gives it seemingly tastier customer-recruiting and cross-selling opportunities. But despite that distribution edge, Royal Bank is the only Big Five member whose shares are actually down in 2010, making it an interesting stock turnaround opportunity, to boot.

CAPS member simonhs sums up the bull case:

[Royal Bank of Canada] is the biggest bank in Canada and is often touted as among the best in the world. Asset management side of RBC's US division has attracted some of the best money managers out there. London division doing very well. RBC also investing heavily in growing Asian markets. Good dividends.

What do you think about Royal Bank, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Scotiabank is a Motley Fool Income Investor recommendation. The Fool's disclosure policy always gets a perfect score.


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Brian Pacampara
TMFEZMagic

I take a look at big 10% moves, as well as stock-shaking analyst calls, on a daily basis for The Fool. While I don't believe in active trading, closely monitoring Mr. Market's mood swings can help identify long-term opportunities.

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