Bank of Montreal

Sound bite for Twitter and StockTwits is: Dividend Growth Bank. In testing the stock price it seem to be coming out as reasonable but above the median. So the price may be a bit high, but it is not extraordinarily high. See my spreadsheet on Bank of Montreal.

I own this stock of Bank of Montreal (TSX-BMO, NYSE-BMO). When I bought this stock in 1983, I thought it was the best bank stock to buy at that time.

What I noticed was an eye popping 50.47% yield on my original purchase price of this stock in 1983. Some 35 years ago, I know but still eye popping. This is why you buy banks for your portfolio.

I have a fair bit of data on this stock. The total return over the past 5, 10, 15, 20, 25 and 30 years is at 14.91%, 10.13%, 10.18%, 9.65%, 14.48% and 15.30% per year. So on average this bank produced a minimum long term of 9.65% total return per year. If you had bought this stock 30 years ago you would have made 15.30% total return per year. This is very good. Note that total return includes capital gains and dividends.

The dividend yield on this bank is moderate to good with low growth. The dividend yield is currently 3.70%, with 5, 10 and historical median dividend yields at 4.29%, 4.58% and 4.47%. Dividend growth has varied over the years with 5, 10, 15, 20, 25, 30 and 34 growth at 4.68%m 2.65%, 7.44%, 7.69%, 7.87%, 6.74% and 5.97% per year.

The 5 year low, median and high median Price/Earnings per Share Ratios are 10.07, 11.42 and 12.77. The corresponding 10 year ratios are 10.06, 11.62 and 12.92. The corresponding historical ones are 10.52, 11.83 and 13.54. These are pretty consistent. The current P/E Ratio is 12.12 based on a stock price of $100.59 and 2018 EPS estimate of $8.30. This stock price testing suggests that the stock price is relatively reasonable and above the median. It is almost expensive.

I get a Graham Price of $100.59. The 10 year low, median and high median Price/Graham Price Ratios are 0.73, 0.86 and 0.97. The current P/GP Ratio is 0.92. This stock price testing suggests that the stock price is relatively reasonable and above the median.

The 10 year Price/Book Value per Share Ratio is 1.49. The current P/B Ratio is 1.58 based on Book Value of $41,114M, Book Value per Share of $63.47 and a stock price of $100.59. The current P/B Ratio is some 6.6% higher than the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and above the median.

The current dividend yield is 3.70% based on dividends of $3.72 and a stock price of $100.59. The historical median dividend yield is 4.47%. The current dividend yield is some 17% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and above the median.

The 10 year median Price/Sales (Revenue) Ratio is 2.55. The current P/S Ratio is 2.93 based on 2018 Revenue estimate of $22,262M, Revenue per Share of $34.36 and a stock price of $100.59. The current P/S Ratio is some 15% higher than the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and above the median.

When I look at analysts' recommendations I find Strong Buy (1), Buy (4) and Hold (10) recommendations. The consensus recommendation would be a Hold. The 12 month stock price consensus is $105.80. This implies a total return of 8.88% with 5.18% from capital gains and 3.70% from dividends based on a current price of $105.80.

Dolores Ford on Frisco Fastball talks about this bank surging to an all-time high on January 2, 2018. Note she is talking is US$. Katy Gagnon on Analysts Buzz also thinks this stock is overbought. She is also using US$. See what analysts are saying about this bank on Stock Chase . BMO does not seem to be a favourite bank.

Bank of Montreal (the Bank) is a financial services provider. The Bank provides a range of personal and commercial banking, wealth management and investment banking products and services. The Bank conducts its business through three operating groups: Personal and Commercial Banking (P&C), Wealth Management and BMO Capital Markets. The P&C business includes two retail and business banking operating segments, such as Canadian Personal and Commercial Banking (Canadian P&C), and the United States Personal and Commercial Banking (U.S. P&C). Its web site is here Bank of Montreal .

The last stock I wrote about was about was Metro Inc. (TSX-MRU, OTC-MTRAF)... learn more. The next stock I will write about will be Royal Bank of Canada (TSX-RY, NYSE-RY)... learn more on Friday, January 5, 2018 around 5 pm. Tomorrow on my other blog I will write about Something to Buy January 2018... learn more on Thursday, January 4, 2018 around 5 pm.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.