TSX:BMO

Stock Analysis Report

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Bank of Montreal

Executive Summary

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


Snowflake Analysis

Excellent balance sheet established dividend payer.


Similar Companies

Share Price & News

How has Bank of Montreal's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: BMO has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.3%

BMO

-4.0%

CA Banks

-4.5%

CA Market


1 Year Return

-19.1%

BMO

-19.5%

CA Banks

-8.8%

CA Market

Return vs Industry: BMO matched the Canadian Banks industry which returned -19.5% over the past year.

Return vs Market: BMO underperformed the Canadian Market which returned -8.8% over the past year.


Shareholder returns

BMOIndustryMarket
7 Day-2.3%-4.0%-4.5%
30 Day0.6%-4.2%-3.8%
90 Day6.2%-0.6%-3.3%
1 Year-15.0%-19.1%-15.2%-19.5%-5.5%-8.8%
3 Year-8.8%-18.8%-7.7%-19.1%0.5%-9.2%
5 Year28.1%5.4%31.8%6.6%28.7%8.9%

Price Volatility Vs. Market

How volatile is Bank of Montreal's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

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

11.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: BMO (CA$80.08) is trading below our estimate of fair value (CA$90.07)

Significantly Below Fair Value: BMO is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: BMO is poor value based on its PE Ratio (11.5x) compared to the CA Banks industry average (10.5x).

PE vs Market: BMO is good value based on its PE Ratio (11.5x) compared to the Canadian market (15.4x).


Price to Earnings Growth Ratio

PEG Ratio: BMO is poor value based on its PEG Ratio (1.5x)


Price to Book Ratio

PB vs Industry: BMO's PB Ratio (1x) is in line with the CA Banks industry average.


Next Steps

Future Growth

How is Bank of Montreal forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

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 (1.7%).

Earnings vs Market: BMO's earnings (7.5% per year) are forecast to grow slower than the Canadian market (22.8% per year).

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

Revenue vs Market: BMO's revenue (2% per year) is forecast to grow slower than the Canadian market (5.8% per year).

High Growth Revenue: BMO's revenue (2% 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 (9.9%).


Next Steps

Past Performance

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

5.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: BMO has high quality earnings.

Growing Profit Margin: BMO's current net profit margins (19.8%) are lower than last year (24.7%).


Past Earnings Growth Analysis

Earnings Trend: BMO's earnings have grown by 5.1% per year over the past 5 years.

Accelerating Growth: BMO's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: BMO had negative earnings growth (-26.3%) over the past year, making it difficult to compare to the Banks industry average (-14.8%).


Return on Equity

High ROE: BMO's Return on Equity (8.6%) is considered low.


Next Steps

Financial Health

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


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet


Financial Institutions Analysis

Asset Level: BMO's Assets to Equity ratio (17.8x) is moderate.

Allowance for Bad Loans: BMO has a low allowance for bad loans (74%).

Low Risk Liabilities: 72% 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 (46%).

Low Risk Deposits: BMO's Loans to Deposits ratio (67%) is appropriate.

Level of Bad Loans: BMO has an appropriate level of bad loans (1%).


Next Steps

Dividend

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

5.29%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: BMO's dividend (5.29%) is higher than the bottom 25% of dividend payers in the Canadian market (1.72%).

High Dividend: BMO's dividend (5.29%) is low compared to the top 25% of dividend payers in the Canadian market (6.1%).


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

Dividend Coverage: With its reasonable payout ratio (60.4%), BMO's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: BMO's dividends in 3 years are forecast to be well covered by earnings (45.5% payout ratio).


Next Steps

Management

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

6.3yrs

Average management tenure


CEO

William White (48 yo)

2.92yrs

Tenure

CA$10,849,790

Compensation

Mr. William Darryl White is Chief Executive Officer of BMO Financial Group in 2017. He serves as a Director of BMO Financial Group, as well as its U.S. subsidiary, BMO Financial Corp. He joined BMO’s in ...


CEO Compensation Analysis

Compensation vs Market: William's total compensation ($USD8.15M) is about average for companies of similar size in the Canadian market ($USD6.97M).

Compensation vs Earnings: William's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
William White
CEO & Director2.92yrsCA$10.85m0.0032%
CA$ 1.7m
Thomas Flynn
Chief Financial Officer9.58yrsCA$3.64m0.0027%
CA$ 1.4m
David Casper
Group Head of North America Commercial Banking10.58yrsCA$5.72m0.00062%
CA$ 327.1k
Cameron Fowler
President of North American Personal & Business Banking11.75yrsCA$4.96m0.000010%
CA$ 5.3k
Daniel Barclay
Head of BMO Capital Markets1.92yrsCA$6.51m0.00053%
CA$ 279.6k
Steve Tennyson
Chief Technology & Operations Officer1.92yrsno data0.00042%
CA$ 221.6k
Jill Homenuk
Head of Investor Relationsno datano datano data
Simon Fish
General Counsel12.42yrsno datano data
Catherine Roche
Head of Marketing & Strategyno datano datano data
Mona Malone
Chief Human Resources Officer and Head of People & Culture1.42yrsno data0.00033%
CA$ 174.1k
L. Menard
President Emeritus of BMO Financial Group2.5yrsno datano data
Michael Thornburrow
Senior Vice President of Corporate Real Estate27.75yrsno datano data

6.3yrs

Average Tenure

59yo

Average Age

Experienced Management: BMO's management team is seasoned and experienced (6.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
William White
CEO & Director2.92yrsCA$10.85m0.0032%
CA$ 1.7m
George Cope
Independent Chairman of the Board0.58yrCA$230.00k0.0098%
CA$ 5.2m
Christine Edwards
Independent Director10.17yrsCA$393.19k0.00052%
CA$ 274.4k
David Harquail
Independent Director2.5yrsCA$215.00k0.0028%
CA$ 1.5m
Linda Huber
Independent Director3.5yrsCA$250.00k0.00030%
CA$ 158.3k
Eric La Flèche
Independent Director8.58yrsCA$215.00k0.0011%
CA$ 575.1k
Sophie Brochu
Independent Director9.58yrsCA$215.00k0.000080%
CA$ 42.2k
Ronald Farmer
Independent Director16.92yrsCA$295.00k0.0019%
CA$ 1.0m
Lorraine Mitchelmore
Independent Director5.58yrsCA$250.00k0.000090%
CA$ 47.5k
Craig Broderick
Independent Director2.17yrsCA$235.00k0.00078%
CA$ 411.5k
Martin Eichenbaum
Independent Director5.58yrsCA$250.00k0.000080%
CA$ 42.2k
Janice Babiak
Independent Director8yrsCA$300.00k0.000080%
CA$ 42.2k

5.6yrs

Average Tenure

61yo

Average Age

Experienced Board: BMO's board of directors are considered experienced (5.6 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.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Bank of Montreal's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Bank of Montreal
  • Ticker: BMO
  • Exchange: TSX
  • Founded: 1817
  • Industry: Diversified Banks
  • Sector: Banks
  • Market Cap: CA$52.761b
  • Shares outstanding: 642.80m
  • Website: https://www.bmo.com

Number of Employees


Location

  • Bank of Montreal
  • 129 rue Saint Jacques
  • Montreal
  • Quebec
  • H2Y 1L6
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
BMOTSX (The Toronto Stock Exchange)YesCommon SharesCACADDec 1972
BMONYSE (New York Stock Exchange)YesCommon SharesUSUSDDec 1972
0UKHLSE (London Stock Exchange)YesCommon SharesGBCADDec 1972
BZZDB (Deutsche Boerse AG)YesCommon SharesDEEURDec 1972
BMO.PRWTSX (The Toronto Stock Exchange)PFD SER 31 CL BCACADJul 2014
BMO.PRYTSX (The Toronto Stock Exchange)3.8% PFD 33 CL BCACADJun 2015
BMO.PRZTSX (The Toronto Stock Exchange)PFD 35 CL B 5%CACADJul 2015
BMO.PRBTSX (The Toronto Stock Exchange)PFD SER 38CACADOct 2016
BMO.PRCTSX (The Toronto Stock Exchange)PFD CL B SER40CACADMar 2017
BMO.PRDTSX (The Toronto Stock Exchange)4.4% PFD SER42 BCACADJun 2017
BMO.PRETSX (The Toronto Stock Exchange)CL B PFD 44CACADSep 2018

Biography

Bank of Montreal provides diversified financial services primarily in North America. It operates through three groups: Personal and Commercial Banking, BMO Wealth Management, and BMO Capital Markets. The c ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/28 23:34
End of Day Share Price2020/10/28 00:00
Earnings2020/07/31
Annual Earnings2019/10/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.