Bank of Montreal (TSX:BMO) - Share price, News & Analysis

BMO fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	2/6
Past Performance	5/6
Financial Health	6/6
Dividends	5/6

BMO Stock Overview

Bank of Montreal provides diversified financial services primarily in North America.

Rewards

Trading at 54% below our estimate of its fair value

Earnings are forecast to grow 7.5% per year

Earnings grew by 59.3% over the past year

Pays a reliable dividend of 4.06%

Risk Analysis

Shareholders have been diluted in the past year

Bank of Montreal Competitors

Royal Bank of Canada

TSX:RY

CA$179.2b

Bank of Nova Scotia

TSX:BNS

CA$96.5b

Canadian Imperial Bank of Commerce

TSX:CM

CA$61.9b

National Bank of Canada

TSX:NA

CA$31.0b

Price History & Performance

Summary of all time highs, changes and price drops for Bank of Montreal
Historical stock prices
Current Share Price	CA$130.92
52 Week High	CA$154.47
52 Week Low	CA$121.76
Beta	1.16
1 Month Change	-10.35%
3 Month Change	-10.62%
1 Year Change	5.65%
3 Year Change	26.37%
5 Year Change	43.60%
Change since IPO	1,511.32%

Recent News & Updates

May 12

Here's Why We Think Bank of Montreal (TSE:BMO) Is Well Worth Watching

It's only natural that many investors, especially those who are new to the game, prefer to buy shares in 'sexy' stocks...

Shareholder Returns

	BMO	CA Banks	CA Market
7D	-0.8%	0.02%	0.8%
1Y	5.6%	3.0%	4.9%

Return vs Industry: BMO exceeded the Canadian Banks industry which returned 3% over the past year.

Return vs Market: BMO matched the Canadian Market which returned 4.8% over the past year.

Price Volatility

Is BMO's price volatile compared to industry and market?
BMO volatility
BMO Average Weekly Movement	2.8%
Banks Industry Average Movement	3.0%
Market Average Movement	9.9%
10% most volatile stocks in CA Market	16.9%
10% least volatile stocks in CA Market	4.3%

Stable Share Price: BMO is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: BMO's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1817	43,863	William White	https://www.bmo.com

Bank of Montreal provides diversified financial services primarily in North America. The company’s personal banking products and services include checking and savings accounts, credit cards, mortgages, and financial and investment advice services; and commercial banking products and services comprise business deposit accounts, commercial credit cards, business loans and commercial mortgages, cash management solutions, foreign exchange, specialized banking programs, treasury and payment solutions, and risk management products for small business and commercial banking customers. It also offers investment and wealth advisory services; digital investing services; financial services and solutions; and investment management, and trust and custody services.

Bank of Montreal Fundamentals Summary

How do Bank of Montreal's earnings and revenue compare to its market cap?
BMO fundamental statistics
Market Cap	CA$87.90b
Earnings (TTM)	CA$8.43b
Revenue (TTM)	CA$28.06b

10.4x

P/E Ratio

1.6x

P/B Ratio

Is BMO overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
BMO income statement (TTM)
Revenue	CA$28.06b
Cost of Revenue	CA$0
Gross Profit	CA$28.06b
Other Expenses	CA$19.64b
Earnings	CA$8.43b

Last Reported Earnings

Jan 31, 2022

Next Earnings Date

May 25, 2022

Earnings per share (EPS)	12.55
Gross Margin	100.00%
Net Profit Margin	30.03%
Debt/Equity Ratio	286.7%

How did BMO perform over the long term?

See historical performance and comparison

Dividends

4.1%

Current Dividend Yield

35%

Payout Ratio

Valuation

Is Bank of Montreal undervalued compared to its fair value and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

>50%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: BMO (CA$130.92) is trading below our estimate of fair value (CA$284.59)

Significantly Below Fair Value: BMO is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: BMO's PE Ratio (10.4x) is in line with the Canadian Banks industry average.

PE vs Market: BMO is good value based on its PE Ratio (10.4x) compared to the Canadian market (11.5x).

Price to Earnings Growth Ratio

PEG Ratio: BMO is poor value based on its PEG Ratio (1.4x)

Price to Book Ratio

PB vs Industry: BMO is overvalued based on its PB Ratio (1.6x) compared to the CA Banks industry average (1.4x).

Future Growth

How is Bank of Montreal forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

7.5%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: BMO's forecast earnings growth (7.5% per year) is above the savings rate (1.6%).

Earnings vs Market: BMO's earnings (7.5% per year) are forecast to grow slower than the Canadian market (7.5% per year).

High Growth Earnings: BMO's earnings are forecast to grow, but not significantly.

Revenue vs Market: BMO's revenue (10.7% per year) is forecast to grow faster than the Canadian market (6.4% per year).

High Growth Revenue: BMO's revenue (10.7% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: BMO's Return on Equity is forecast to be low in 3 years time (15.7%).

Past Performance

How has Bank of Montreal performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

7.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: BMO has high quality earnings.

Growing Profit Margin: BMO's current net profit margins (30%) are higher than last year (23.3%).

Past Earnings Growth Analysis

Earnings Trend: BMO's earnings have grown by 7.1% per year over the past 5 years.

Accelerating Growth: BMO's earnings growth over the past year (59.3%) exceeds its 5-year average (7.1% per year).

Earnings vs Industry: BMO earnings growth over the past year (59.3%) exceeded the Banks industry 39.3%.

Return on Equity

High ROE: BMO's Return on Equity (14.5%) is considered low.

Financial Health

How is Bank of Montreal's financial position? (This company is analysed differently as a bank or financial institution)

Financial Health Score

6/6

Financial Health Score 6/6

Asset Level
Allowance for Bad Loans
Low Risk Liabilities
Loan Level
Low Risk Deposits
Level of Bad Loans

Financial Position Analysis

Debt to Equity History and Analysis

Balance Sheet

Financial Institutions Analysis

Asset Level: BMO's Assets to Equity ratio (17.1x) is moderate.

Allowance for Bad Loans: BMO has a sufficient allowance for bad loans (108%).

Low Risk Liabilities: 73% of BMO's liabilities are made up of primarily low risk sources of funding.

Loan Level: BMO has an appropriate level of Loans to Assets ratio (47%).

Low Risk Deposits: BMO's Loans to Deposits ratio (69%) is appropriate.

Level of Bad Loans: BMO has an appropriate level of bad loans (0.5%).

Dividend

What is Bank of Montreal current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

4.06%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: BMO's dividend (4.06%) is higher than the bottom 25% of dividend payers in the Canadian market (1.91%).

High Dividend: BMO's dividend (4.06%) is low compared to the top 25% of dividend payers in the Canadian market (4.91%).

Stability and Growth of Payments

Stable Dividend: BMO's dividends per share have been stable in the past 10 years.

Growing Dividend: BMO's dividend payments have increased over the past 10 years.

Current Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (34.7%), BMO's dividend payments are well covered by earnings.

Future Payout to Shareholders

Future Dividend Coverage: BMO's dividends in 3 years are forecast to be well covered by earnings (40.6% payout ratio).

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

3.3yrs

Average management tenure

CEO

William White (49 yo)

4.5yrs

Tenure

CA$14,875,737

Compensation

Mr. William Darryl White is Chief Executive Officer of Bank of Montreal in November 1, 2017. He serves as a Director of Bank of Montreal since May 24, 2017, as well as its U.S. subsidiary, BMO Financial Co...

CEO Compensation Analysis

Compensation vs Market: William's total compensation ($USD11.59M) is above average for companies of similar size in the Canadian market ($USD7.51M).

Compensation vs Earnings: William's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: BMO's management team is considered experienced (3.3 years average tenure).

Board Members

Experienced Board: BMO's board of directors are considered experienced (7.2 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 4.5%.

Data	Last Updated (UTC time)
Company Analysis	2022/05/21 00:00
End of Day Share Price	2022/05/20 00:00
Earnings	2022/01/31
Annual Earnings	2021/10/31