Royal Bank of Canada (NYSE: RY) , more commonly known by the acronym RBC, has a dividend yield of 3.8%. The yield has been higher in the past, notably during recessions, but it's still toward the high side of the historical range. There's a good reason for the lofty yield, but also a good reason to buy the stock anyway.
On the whole, RBC is a fairly simple business. As a bank , it takes in deposits and uses that cash to make loans. The bank makes the difference between what it pays for deposits and what it charges for loans. It has other businesses, but this is the core of the story, even if it is a purposely simplified view.
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Why Is Royal Bank of Canada's Dividend So High?