Royal Bank of Canada

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As the largest bank in Canada, Royal Bank of Canada ( RY) certainly meets the blue-chip criteria. The firm boasts more than CAD 750 billion in assets and serves more than 57 million clients worldwide. Still, that hasn't spared the company from significant short-selling. At present, a short interest ratio of 15.7 means that it would take more than three weeks for shorts to cover their positions at current volume levels.

By and large, Canadian banks are in better financial shape than their major American peers. That's thanks in large part to less extreme lending practices in our neighbor to the North. That doesn't mean that Canadian banks have been immune -- large U.S. segments at most large Canadian banks as well as relatively low balance sheet capitalization (compared to a healthy U.S. regional bank, for instance) make the sector susceptible to economic headwinds.

But Royal Bank of Canada has been dealing with those challenges head-on. For starters, the bank unloaded its U.S. banking business last year, taking a major drag off of earnings. Canadian banking operations, which currently make up more than half of the firm's business, continue to earn high returns for banks -- and that should translate into a better-capitalized balance sheet over the mid-term.

Meanwhile, a 4.13% dividend yield makes RY one of the highest-yielding financial names on the NYSE.

Royal Bank of Canada, one of TheStreet Ratings' top-rated diversified bank stocks, shows up on a recent list of 10 High-Quality Stocks for 2012.

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