Royal Bank of Canada raises dividend 4.8%

Royal bank of canada

On February 24, 2017, “Royal Bank of Canada (RY on TSX and NYSE) announced today that its board of directors declared an increase to its quarterly common share dividend of four cents per share, or five per cent, to 87 cents per share.” (rbc.com)

Royal Bank of Canada has seen an incredible run-up consisting of a 44% one year gain in share price. The stock is at an all-time high now and is constantly pushing on them, which is what I’m coming to really like in stock investing.

That’s the strategy I followed on Apple. Unfortunately, I don’t see as many catalysts with RY. However, the reason I chose RY over some other Canadian bank was due to it’s U.S. exposure, which comes second after TD. Overall I preferred RY’s valuation at the time I purchased my shares.

I have a pretty small position in RY which has increased 50% and makes it difficult for me to stomach adding any more at these prices. The share price has been pushing hard to reach $100.

I have positions in many of the Canadian banks and they have all done incredibly well in the last year. In addition, my exposure to the Financials sector is about 1/3 of my entire portfolio. I feel as though, unless I’m adding U.S. financials to geographically diversify, then I should be building my positions in other sectors as it’s slowly becoming sizable.

Dividend Income increased 0.16%

Considering the Dividend Beginner portfolio contains 25 shares of Royal Bank of Canada, my annual income from RY has increased by $4.00, from $83 to $87.

My 12-month forward dividend income has increased from $2,544.11 to $2,548.11, an increase of 0.16%. My income from RY accounts for 3.41% of my annual dividend income.

This would have required an investment of $111, at a yield of 3.61% (RY’s dividend yield on the date of the raise) to generate $4.00 in dividend income. That’s the equivalent of getting up to 11 hours of your life back, at a Quebec minimum wage of $10.75.

Before Net Increase After
Annual Dividend $2,544.11 $4.00
$2,548.11
Monthly Dividend $212.01
$0.33
$212.34
Percentage Increase 0.16%

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