Bank of Montreal

I am reviewing this bank today as its annual statement for 2008 has been published. The Bank of Montreal (TSX-BMO) is on Mike Higgs’ list at www.dividendgrowth.org/Report.htm, on the Dividend Achievers list at www.dividendachievers.com/, and on the Dividend Aristocrats list at www.tmxmoney.com/en/individual.html (see indices).

I bought this stock in 1978; however, I have only tracked this stock on Quicken since Jan 1988. Since then I have made an average annual return of 15.3% on this stock. This return includes dividends and I am using today’s price of $35.75 in this calculation. This just points out that banks are great stocks for the long term.

I have concerns about the Bank of Montreal inability to grow Revenue and Earnings per Share (EPS), but they are doing fine in growing the dividend payments over the last 5 years and not too bad with growing the Book Value. Also, the Graham Price is higher than the current price.

In the recent past, the Bank of Montreal has been raising their dividend twice a year. However, there were times in the past when they went over a year before raising the dividend. Also, from 1989 to 1992 they did not raise their dividend at all. I note that the first dividend declared for February 2009 is the same as the current dividends and they do not expect to raise the dividends in the near term. They do not statement when dividends will be raised again. Note that approximately 4% of my return on this stock is dividend income over the last 5 and 10 years.

BMO is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. They are international bank having banking in Canada and US. They have clients, corporate, institutional and governmental, in UK, Europe, Asia and South America. Its web site is www.bmo.com. See my spreadsheet at www.spbrunner.com/stocks/bmo.htm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.