Royal Bank Of Canada, Scotiabank Offer Big Yields
When scouting for large-cap stocks that pay dividends, investors don't have to look far. Sometimes they can be found in IBD's Big Cap 20, which appears in every Tuesday edition.
In this week's list,Royal Bank of Canada ( RY ) andBank of Nova Scotia ( BNS ) are highly rated big caps that pay hefty dividends. Both are members of the Banks-Money Center industry group, which ranked No. 16 in Tuesday's IBD.
Royal Bank of Canada is Canada's largest bank by assets and market capitalization. It provides commercial and personal banking, wealth management and investment banking services.
The company currently pays a quarterly dividend of 60 Canadian cents a share, or about 61 cents a share in U.S. currency.
On an annualized basis, Royal Bank of Canada pays $2.44 a share (in U.S. dollars), giving it a yield of about 3.9% vs. around 2.55% for the S&P 500. The bank most recently raised its payout in August. Royal Bank's dividend has doubled since 2005.
In late November, Royal Bank reported fiscal 2012 earnings that grew 8% to $4.92 a share. The company's fiscal year ends in October.
Bank of Nova Scotia, otherwise known as Scotiabank, is Canada's third-largest bank by assets. The company offers business and personal banking, as well as brokerage and insurance services.
The bank has paid dividends to its common stockholders each year since its founding in 1832. Bank of Nova Scotia raised its payout once in the fiscal 2011 year ended in October. It boosted its payout two times in fiscal 2012.
Bank of Nova Scotia currently pays about 58 U.S. cents a share per quarter in dividends, which works out to $2.32 a share annually.
The stock has a dividend yield of about 4%, which is among the highest in the 20 dividend-paying stocks in its industry group.
Last month, Bank of Nova Scotia delivered fiscal 2012 earnings that rose 9% to $4.66 a share. Analysts see its fiscal 2013 earnings rising 12% to $5.22 a share.
The company agreed to buy a 20% stake in China's Bank of Guangzhou in 2011, but has yet to close the deal due to regulatory hurdles.