Is RBC stock a buy right now?

Davis Rea president and co-chief investment officer Christine Poole sees recent weakness in Royal Bank of Canada (RBC Stock Quote, Chart, News, Analysts, Financials TSX:RY) as a buying opportunity for investors seeking exposure to the Canadian banking sector.

Speaking on BNN Bloomberg Market Call on March 17, Poole said the stock’s pullback comes after a strong run, but does not change its long-term appeal.

“It’s done well, but this pullback, I think, I would be adding it for exposure in the Canadian banking sector,” she said.

Poole highlighted RBC’s scale and diversification, pointing to its leading wealth management business and relatively defensive positioning compared with peers. While its dividend yield of about t3% is not the highest among Canadian banks, she noted it has a consistent track record of annual dividend increases.

She also pointed to the bank’s acquisition of HSBC Canada, saying integration has largely been completed with cost efficiencies realized and cross-selling initiatives now underway.

“So trading at a premium to the group, which it should, because that has the highest ROE,” Poole said.

She tied the bank’s outlook to broader economic conditions. “If the Canadian economy kind of does okay… Royal Bank should perform reasonably well as well,” she said, adding that fiscal stimulus could provide additional support.

Shares of Royal Bank of Canada have gained 40.97% over the past 12 months and 94.62% over five years. Among analysts covering the stock, 14 rate it “Buy,” two “Hold,” and one “Sell,” with a consensus target price of $252.33.

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