TSX:BMO

Stock Analysis Report

Bank of Montreal

Executive Summary

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

Snowflake

Fundamentals

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


Market Performance


7 Day Return

1.5%

BMO

1.7%

CA Banks

0.2%

CA Market


1 Year Return

-6.6%

BMO

1.7%

CA Banks

1.2%

CA Market

Return vs Industry: BMO underperformed the Canadian Banks industry which returned 1.7% over the past year.

Return vs Market: BMO underperformed the Canadian Market which returned 1.2% over the past year.


Shareholder returns

BMOIndustryMarket
7 Day1.5%1.7%0.2%
30 Day0.8%0.9%-2.5%
90 Day-1.9%2.2%-1.5%
1 Year-2.8%-6.6%6.1%1.7%4.7%1.2%
3 Year27.8%14.0%35.3%20.1%14.0%3.8%
5 Year47.5%21.1%55.1%26.7%26.4%8.1%

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?

15.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: BMO (CA$97.22) is trading below our estimate of fair value (CA$114.65)

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


Price To Earnings Ratio

PE vs Industry: BMO is good value based on its PE Ratio (10.3x) compared to the Banks industry average (11.1x).

PE vs Market: BMO is good value based on its PE Ratio (10.3x) compared to the Canadian market (13.7x).


Price to Earnings Growth Ratio

Low PEG Ratio: BMO is poor value based on its PEG Ratio (6.2x)


Price to Book Ratio

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


Next Steps

Future Growth

How is Bank of Montreal forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

1.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: BMO's forecast earnings growth (1.6% per year) is below the savings rate (1.9%).

Earnings vs Market: BMO's earnings (1.6% per year) are forecast to grow slower than the Canadian market (13.3% per year).

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

Revenue vs Market: BMO's revenue (3.1% per year) is forecast to grow slower than the Canadian market (5.7% per year).

High Growth Revenue: BMO's revenue (3.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: BMO's Return on Equity is forecast to be low in 3 years time (12.9%).


Next Steps

Past Performance

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

7.7%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: BMO's earnings have grown by 7.7% per year over the past 5 years.

Accelerating Growth: BMO's earnings growth over the past year (26.3%) exceeds its 5-year average (7.7% per year).

Earnings vs Industry: BMO earnings growth over the past year (26.3%) exceeded the Banks industry 6.8%.


Return on Equity

High ROE: BMO's Return on Equity (12.4%) is considered low.


Return on Assets

ROA vs Industry: BMO's Return on Assets is below or equal to the Banks industry average last year.


Return on Capital Employed

ROCE Improving: Insufficient data to calculate BMO's Return on Capital Employed to determine if it has improved over the past 3 years.


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

Inventory Level: BMO has a low level of unsold assets or inventory.

Debt Coverage by Assets: BMO's debt is covered by short term assets (assets are 1.860530x debt).


Financial Institutions Analysis

Asset Level: BMO's level of assets compared to its equity is moderate.

Allowance for Bad Loans: BMO has a low allowance for bad loans.

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

Loan Level: BMO has an acceptable proportion of non-loan assets held.

Low Risk Deposits: BMO's loans are broadly funded by customer deposits.

Level of Bad Loans: BMO has an appropriate level of bad loans (0.58%)


Next Steps

Dividend

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

4.24%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Bank of Montreal before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company4.2%marketbottom25%2.0%markettop25%5.9%industryaverage4.3%forecastin3Years4.3%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: BMO's dividend (4.24%) is higher than the bottom 25% of dividend payers in the Canadian market (2%).

High Dividend: BMO's dividend (4.24%) is low compared to the top 25% of dividend payers in the Canadian market (5.94%).

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 reasonably low payout ratio (42.1%), 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 (44.1% payout ratio).


Next Steps

Management

What is the CEO of Bank of Montreal's salary, the management and board of directors tenure and is there insider trading?

5.2yrs

Average management tenure


CEO

William White (47yo)

1.9yrs

Tenure

CA$10,124,234

Compensation

Mr. Darryl White is Chief Executive Officer of BMO Financial Group. He was appointed on November 1, 2017. He joined BMO in 1994, and has held a number of senior management positions, including Executive ...


CEO Compensation Analysis

Compensation vs. Market: William has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the Canadian market.

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


Management Age and Tenure

5.2yrs

Average Tenure

57yo

Average Age

Experienced Management: BMO's management team is seasoned and experienced (5.2 years average tenure).


Board Age and Tenure

8.9yrs

Average Tenure

63yo

Average Age

Experienced Board: BMO's board of directors are considered experienced (8.9 years average tenure).


Insider Trading

Insider Buying: BMO insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyCA$917,00030 Aug 19
Philip Orsino
EntityIndividual
Role
Member of the Board of Directors
Director
Shares10,000
Max PriceCA$91.70
BuyCA$87,92021 Dec 18
Ronald Farmer
EntityIndividual
Role
Member of the Board of Directors
Director
Shares1,000
Max PriceCA$87.92
BuyCA$89,35014 Dec 18
Ronald Farmer
EntityIndividual
Role
Member of the Board of Directors
Director
Shares1,000
Max PriceCA$89.35
BuyCA$1,497,60012 Dec 18
George Cope
EntityIndividual
Role
Member of the Board of Directors
Director
Shares16,000
Max PriceCA$93.60
BuyCA$929,58312 Dec 18
Philip Orsino
EntityIndividual
Role
Member of the Board of Directors
Director
Shares10,000
Max PriceCA$92.96
BuyCA$455,93012 Dec 18
Craig Broderick
EntityIndividual
Shares5,000
Max PriceCA$91.26

Ownership Breakdown


Management Team

  • L. Ménard (73yo)

    President Emeritus of BMO Financial Group

    • Tenure: 1.5yrs
  • Tom Flynn

    Chief Financial Officer

    • Tenure: 8.6yrs
    • Compensation: CA$3.69m
  • Simon Fish (57yo)

    General Counsel

    • Tenure: 11.4yrs
  • William White (47yo)

    CEO & Director

    • Tenure: 1.9yrs
    • Compensation: CA$10.12m
  • Pat Cronin

    Chief Risk Officer

    • Tenure: 8.5yrs
    • Compensation: CA$7.51m
  • Cam Fowler

    President of North American Personal & Business Banking

    • Tenure: 10.8yrs
    • Compensation: CA$5.06m
  • Jill Homenuk

    Head of Investor Relations

    • Tenure: 0yrs
  • Catherine Roche

    Head of Marketing & Strategy

    • Tenure: 0yrs
  • Steve Tennyson

    Chief Technology & Operations Officer

    • Tenure: 0.9yrs
  • Mona Malone

    Chief Human Resources Officer and Head of People & Culture

    • Tenure: 0.4yrs

Board Members

  • George Cope (57yo)

    Director

    • Tenure: 13.3yrs
    • Compensation: CA$230.00k
  • Christine Edwards (67yo)

    Director

    • Tenure: 9.2yrs
    • Compensation: CA$292.50k
  • Philip Orsino (65yo)

    Director

    • Tenure: 20.3yrs
    • Compensation: CA$251.13k
  • Rob Prichard (70yo)

    Non-Executive Chairman

    • Tenure: 7.6yrs
    • Compensation: CA$412.50k
  • Don Wilson (71yo)

    Director

    • Tenure: 11.6yrs
    • Compensation: CA$312.50k
  • Eric La Flèche (57yo)

    Director

    • Tenure: 7.6yrs
    • Compensation: CA$215.00k
  • Sophie Brochu (55yo)

    Director

    • Tenure: 8.6yrs
    • Compensation: CA$215.00k
  • Ron Farmer (69yo)

    Director

    • Tenure: 15.9yrs
    • Compensation: CA$295.00k
  • William White (47yo)

    CEO & Director

    • Tenure: 1.9yrs
    • Compensation: CA$10.12m
  • Jan Babiak (61yo)

    • Tenure: 7yrs
    • Compensation: CA$276.06k

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$62.127b
  • Shares outstanding: 639.04m
  • 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
0UKHLSE (London Stock Exchange)YesCommon SharesGBCADDec 1972
BZZDB (Deutsche Boerse AG)YesCommon SharesDEEURDec 1972
BMONYSE (New York Stock Exchange)YesCommon SharesUSUSDDec 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, Wealth Management, and BMO Capital Markets. The compa ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/16 23:32
End of Day Share Price2019/10/16 00:00
Earnings2019/07/31
Annual Earnings2018/10/31


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.