Dividend Increase Royal Bank of Canada

Dividend increase Royal Bank of Canada

At the 24th of February the board of Royal Bank of Canada (RY) decided to increase the quarterly dividend from CAD 0,83 to CAD 0,87 per quarter. This means an increase of CAD 0,04 per share per year which translates to a 4,8% increase. Compared to the same quarter a year ago the raise is even bigger since the company is used to raising the dividend twice a year. Compared to a year ago the raise is 7,4%! The dividend is paid on May the 24th 2017 to shareholders of record on April the 25th 2017. This is the 7th consecutive year in which RY increases the quarterly dividend.

 

The Pursuit

Since I have 9 shares this increase means that my yearly dividend for Royal Bank of Canada is now CAD 31,32. Up from CAD 29,88 or a CAD 1,44 increase in yearly dividends. After taxes I will receive $ 26,62 per year from the company.

This increase means RY currently yields 3,60% and my yield on cost rises to 4,44%.

 

Conclusion

Royal Bank of Canada is one of the companies in my portfolio that is just mind blowing! I own the stock for roughly a year and the company raises dividends twice a year. My Yield on Cost went up from 4,01% to 4,44% in just over a year and I’m standing at almost 25% unrealized gains for the company. Although I have to admit that the last thing is also a problem. I regret only 1 thing and that is that I didn’t buy more RY and TD when I bought them. I bought half a position in both banks to realize 1 full position in the banks together where I should have bought a full position in both banks. It would realize more exposure in Canada and the stocks are just great. At the current valuation I feel the valuation is stretched so I don’t buy more.

But in the meantime I am collecting the dividends and I love it! 7,4% growth in a year is very nice! Now I’m curious what the other half of my position will do. I expect a raise from TD also around this time of year!

Do you own the Canadian banks? Would you like to own them? And if you do, how do you rate the past performance and future prospects? Discuss it here!

 

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