Royal Bank of Canada(RY:NYE) CIBC initiates with Outperform on lower risk

STA Research
by: STA Research

CIBC’s analyst’s Paul Holden initiated his coverage on the Royal Bank of Canada with a Outperform rating and a $127 target. Holden believes the bank has lower risk exposure than it’s  peers, as a result of it’s very conservative capital ratios which are the best in the financial sector.

STA Research(stocktargetadvisor) has a average target of $96.50, and a consensus Buy rating. STA’s  view of the stock is Slightly Bullish with a score of 6.3 out of 10, where 0 is very bearish and 10 very bullish.                                                                                                                                                                                                                                                                                                                               
What to like:
Superior risk adjusted returns
This stock has performed well, on a risk adjusted basis, compared to its sector peers(for a hold period of at least 12 months) and is in the top quartile.
Superior total returns
The stock has outperformed its sector peers on average annual total returns basis in the past 5 years (for a hold period of at least 12 months) and is in the top quartile.
High dividend returns
The stock has outperformed its sector peers on average annual dividend returns basis in the past 5 years (for a hold period of at least 12 months) and is in the top
quartile. This can be a good buy, especially if it is outperforming on total return basis , for investors seeking high income yields.
Superior return on equity
The company management has delivered better return on equity in the most recent 4 quarters then its peers, placing it in the top quartile.
Low debt
The company is less leveraged than its peers ,, and is among the top quartile, which makes it more flexible. However, do check the news and look at its sector.
Sometimes this is low because the company is not growing and has no growth potential.                                                                                                                                                                                                                                                                                                                                                               
What to not like:
Low market capitalization
This is among the smaller entities in its sectors with below median market capitalization. That may make it less stable in the long run unless it has a unique
technology or market which can help it grow or get acquired in future.
Overpriced compared to earnings
The stock is trading high compared to its peers on a price to earning basis and is above the sector median.
Overpriced compared to book value
The stock is trading high compared to its peers median on a price to book value basis.

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