Stock fact sheet · data as of
Royal Bank of Canada (RY): fair value, margin of safety and Wheel Score
Financial Services · Banks - Diversified · Canada · Value
Is RY undervalued?
RY has a margin of safety of 48%: the stock closed at 193.82 on 16 Oct 2026 against a GLS average fair value of 375.59. 5 of the 9 valuation models that produced a number sit above the price. Our screens treat a discount this large as a strong starting point for a cash-secured put, not as a verdict - the fair value is a model output, and a wide gap can mean the models are missing something the market knows.
There is a wide gap between DDM (96.82) and Payback Time (1,061.25). When the models are this far apart the "fair value" is really a range, and the margin of safety above should be read with that range in mind.
The nightly engine files RY under Value: positive earnings at a P/E of 18 or less.
Nine valuation models for RY
Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.
| Model | Value | vs price | What it measures |
|---|---|---|---|
| DCF | 178.82 | -8% | Present value of the projected free cash flows, discounted at the cost of capital |
| Graham Number | 196.36 | +1% | The most a defensive investor pays for the earnings and book value per share |
| Graham Growth | 306.81 | +58% | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields |
| Lynch | 107.97 | -44% | EPS × the earnings growth rate (PEG of 1), growth capped at 25% |
| GLS Growth | 568.96 | +194% | EPS compounded ten years at the blended growth rate, discounted back at 15% a year |
| 10 Cap | 735.38 | +279% | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10% |
| Payback Time | 1,061.25 | +448% | Eight years of compounded free cash flow: the price at which the business pays for itself |
| DDM | 96.82 | -50% | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend |
| EPV | 127.91 | -34% | Earnings power value: current EPS capitalised at 9% with no growth |
| Zombie (liquidation) | -1,424.23 | -835% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 225.00 | +16% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
Royal Bank of Canada scores 6 of 9 on the Piotroski F-score: a middling result that passes the Sunday Scan's "6 or more" rule. Some of the nine tests on profitability, leverage and efficiency are failed, so the accounts are worth a look before selling a put on the name. On durability RY scores 7.4/10 on the GLS Moat - a middle reading; the Scorecard on the Quote page's Financials tab shows which ten-year lines are steady and which are not.
Returns on capital are thin or negative - ROIC 2.1%, ROE 14.6%, ROA 0.9% - with debt at 6.00 times equity and a free-cash-flow yield of 12.0%. Debt of 6.00 times equity is on the high side for the sector and is worth checking against the cash flow before treating the stock as a long-term hold.
The dividend yield is 2.38% at a payout ratio of 41%; for a wheel trader holding assigned shares the dividend adds to the covered-call premium, and the ex-dividend date is worth knowing before a call is sold.
Institutional ownership scores 8/10, insider activity 5/10 and Congressional trading 1/10 on the GLS smart-money scales.
| Piotroski F-score | 6 / 9 | ROIC | 2.1% |
|---|---|---|---|
| GLS Moat | 7.4 / 10 | ROE | 14.6% |
| Debt / equity | 6.00 | ROA | 0.9% |
| Free-cash-flow yield | 12.0% | Payout ratio | 41% |
| Institutions | 8 / 10 | Insiders · Congress | 5 · 1 / 10 |
Wheel Score 76: Good
With a Wheel Score of 76 - the Good band - Royal Bank of Canada clears the Sunday Scan's "70 or higher" rule. The parts: Value 25/25, Health 13/20, Moat 11/15, Premium 9/20, Stability 17/20; Premium (9/20) scores lowest.
Implied volatility is 24% on the near-the-money contracts 20-60 days out: some premium, but under the 35-60% range the Wheel Score pays full marks for (9 of 20 points). Chain open interest is 33,846 contracts across all expiries - enough for the wheel at normal size.
Volume runs at 727k shares a day on a market cap of $269.4B, with a beta of 0.91; the Stability part of the Wheel Score gives that 17 of 20.
| Part | Points | From | |
|---|---|---|---|
| Value | 25 / 25 | 48% margin of safety | |
| Health | 13 / 20 | Piotroski 6/9 | |
| Moat | 11 / 15 | moat 7.4/10 | |
| Premium | 9 / 20 | implied volatility 24% | |
| Stability | 17 / 20 | 727k shares/day, $269.4B cap, beta 0.91 |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.
Upcoming events
The next earnings report is due on 3 Dec 2026, 48 days away - outside the window of a 30-45-day put sold today. The shares go ex-dividend on 26 Oct 2026 (1.24 per share), so a covered call sold before then carries a small early-assignment risk around that date.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
Similar stocks in Banks - Diversified
The 12 companies below are the closest to Royal Bank of Canada by market cap within the Banks - Diversified industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.
| Stock | Close | Fair value | MoS | Wheel | Mkt cap |
|---|---|---|---|---|---|
| MUFG Mitsubishi UFJ Financial Group, Inc. | 21.86 | 703.78 | +97% | 94Prime | $250.5B |
| WFC Wells Fargo & Company | 80.91 | 139.23 | +42% | 77Good | $244.7B |
| HSBC HSBC Holdings plc | 94.54 | 140.80 | +33% | 81Prime | $327.3B |
| C Citigroup Inc. | 123.19 | 162.45 | +24% | 71Good | $206.6B |
| BACRP Bank of America Corporation PFD SER B 7% | 300.00 | 483.13 | +38% | 39No options | $361.5B |
| BAC Bank of America Corporation | 51.70 | 156.82 | +67% | 82Prime | $361.5B |
| TD The Toronto-Dominion Bank | 117.63 | 158.47 | +26% | 75Good | $198.7B |
| SAN Banco Santander, S.A. | 13.41 | 37.09 | +64% | 80Prime | $196.9B |
| UBS UBS Group AG | 47.15 | 75.19 | +37% | 85Prime | $144.4B |
| BBVA Banco Bilbao Vizcaya Argentaria, S.A. | 25.95 | 91.89 | +72% | 82Prime | $144.3B |
| BMO Bank of Montreal | 166.05 | 311.77 | +47% | 74Good | $115.4B |
| BNS The Bank of Nova Scotia | 91.12 | 169.08 | +46% | 74Good | $111.1B |
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Start free See the Sunday ScanQuestions about RY
Is RY undervalued right now?
By the GLS models, yes: at 193.82 the stock is 48% below the average fair value of 375.59 (data as of 16 Oct 2026). Whether the discount is deserved is the question to research next.
What is the Wheel Score of RY and what does it mean?
RY scores 76 out of 100 (Good). The Wheel Score blends the margin of safety (25 points), Piotroski health (20), the GLS moat (15), the option premium on offer (20) and trading stability (20) into one number that ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned. 80 and above is Prime, 65-79 Good, 50-64 Fair, under 50 Weak.
What is the GLS fair value for RY?
375.59 per share as of 16 Oct 2026 - the simple average of the 9 valuation models (out of nine: DCF, Graham Number, Graham Growth, Lynch, GLS Growth, 10 Cap, Payback Time, DDM and EPV) that produced a positive value. The models run every night on the latest filings; the Quote page lets you switch any of them off and add a margin of safety of your own.
When does Royal Bank of Canada report earnings next?
The next earnings report is due on 3 Dec 2026 (before the open), 48 days from the data date of 16 Oct 2026. The Calendars page lists every upcoming report with its time of day.
Does RY have listed options, and how liquid are they?
Yes. The nightly snapshot found 400 listed contracts with 33,846 open interest across all expiries and implied volatility of 24% on the near-the-money contracts. The Options scanner lists the cash-secured put and covered call set-ups with premium and annualised yield worked out.