Should You Buy Royal Bank of Canada (RY) for Income in 2025? Here's What to Know

Royal Bank of Canada (NYSE:RY) is included among the 11 Best Canadian Dividend Stocks to Buy Now.

Royal Bank of Canada (NYSE:RY) is considered a reliable option for investors seeking consistent dividend income. The bank’s broad revenue streams, diverse client base, effective cost control, strong asset quality, and steady earnings growth all contribute to the strength of its stock and dividend performance. Over the last ten years, the bank has increased its earnings at a compound annual rate of 7%, while its dividend has grown at a rate of 8%.

Royal Bank of Canada (NYSE:RY)’s core business remains strong, supported by a growing loan portfolio, a stable deposit base, and continuous gains in operational efficiency. These factors help reinforce the bank’s ability to maintain and raise its dividend. Backed by a solid balance sheet and prudent risk management practices, Royal Bank is well-positioned for long-term growth. Management has set a goal of growing the dividend by roughly 7% annually over the medium term, and with a payout ratio between 40% and 50%, there is still significant room for further dividend increases while keeping its financial position strong.

On May 29, Royal Bank of Canada (NYSE:RY) declared a 4.1% hike in its quarterly dividend to C$1.54 per share. This marked the company’s 15th consecutive year of dividend growth, which makes it one of the best dividend Canadian stocks to invest in. In the most recent quarter, the company returned $2.6 billion to shareholders through dividends and share repurchases. The stock has a dividend yield of 3.4%, as of July 15.

While we acknowledge the potential of RY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.