LSE:0UKH

Stock Analysis Report

Executive Summary

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


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: 0UKH's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

5.7%

0UKH

-8.5%

GB Banks

3.9%

GB Market


1 Year Return

-36.7%

0UKH

-38.0%

GB Banks

-22.4%

GB Market

Return vs Industry: 0UKH underperformed the UK Banks industry which returned -35.7% over the past year.

Return vs Market: 0UKH underperformed the UK Market which returned -23% over the past year.


Shareholder returns

0UKHIndustryMarket
7 Day5.7%-8.5%3.9%
30 Day-36.7%-24.2%-16.1%
90 Day-36.5%-36.7%-26.1%
1 Year-34.0%-36.7%-33.7%-38.0%-18.2%-22.4%
3 Yearn/a-33.8%-42.9%-11.7%-23.1%
5 Yearn/a-32.7%-46.2%1.9%-21.5%

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

No news available

Valuation

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

48.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 0UKH (CA$64.1) is trading below our estimate of fair value (CA$125.53)

Significantly Below Fair Value: 0UKH is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 0UKH is poor value based on its PE Ratio (8.1x) compared to the Banks industry average (4.5x).

PE vs Market: 0UKH is good value based on its PE Ratio (8.1x) compared to the UK market (12.4x).


Price to Earnings Growth Ratio

PEG Ratio: 0UKH is poor value based on its PEG Ratio (4.4x)


Price to Book Ratio

PB vs Industry: 0UKH is overvalued based on its PB Ratio (1x) compared to the GB Banks industry average (0.5x).


Next Steps

Future Growth

How is Bank of Montreal forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

1.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 0UKH's forecast earnings growth (1.9% per year) is above the savings rate (0.5%).

Earnings vs Market: 0UKH's earnings (1.9% per year) are forecast to grow slower than the UK market (15.5% per year).

High Growth Earnings: 0UKH's earnings are forecast to grow, but not significantly.

Revenue vs Market: 0UKH's revenue (2.3% per year) is forecast to grow faster than the UK market (2.3% per year).

High Growth Revenue: 0UKH's revenue (2.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 0UKH's Return on Equity is forecast to be low in 3 years time (12.4%).


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

Quality Earnings: 0UKH has high quality earnings.

Growing Profit Margin: 0UKH's current net profit margins (22.8%) are lower than last year (25.1%).


Past Earnings Growth Analysis

Earnings Trend: 0UKH's earnings have grown by 7.7% per year over the past 5 years.

Accelerating Growth: 0UKH's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 0UKH had negative earnings growth (-3.2%) over the past year, making it difficult to compare to the Banks industry average (29.6%).


Return on Equity

High ROE: 0UKH's Return on Equity (11.2%) 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

Inventory Level: 0UKH has a low level of unsold assets or inventory.

Debt Coverage by Assets: 0UKH's debt is covered by short term assets (assets are 1.9x debt).


Financial Institutions Analysis

Asset Level: 0UKH's level of assets compared to its equity is moderate.

Allowance for Bad Loans: 0UKH has a low allowance for bad loans.

Low Risk Liabilities: 0UKH's liabilities are made up of primarily low risk sources of funding.

Loan Level: 0UKH has an acceptable proportion of non-loan assets held.

Low Risk Deposits: 0UKH's loans are broadly funded by customer deposits.

Level of Bad Loans: 0UKH has an appropriate level of bad loans (0.65%)


Next Steps

Dividend

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

5.97%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: 0UKH's dividend (5.97%) is higher than the bottom 25% of dividend payers in the UK market (2.69%).

High Dividend: 0UKH's dividend (5.97%) is low compared to the top 25% of dividend payers in the UK market (7.48%).


Stability and Growth of Payments

Stable Dividend: 0UKH's dividends per share have been stable in the past 10 years.

Growing Dividend: 0UKH's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (46.9%), 0UKH's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 0UKH's dividends in 3 years are forecast to be well covered by earnings (46.6% payout ratio).


Next Steps

Management

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

5.6yrs

Average management tenure


CEO

William White (47yo)

2.25s

Tenure

CA$10,849,790

Compensation

Mr. William Darryl White is Chief Executive Officer of BMO Financial Group (“BMOFG”) in November 2017. He serves as a Director of BMO Financial Group, as well as its U.S. subsidiary, BMO Financial Corp.  ...


CEO Compensation Analysis

Compensation vs Market: William's total compensation ($USD7.65M) is above average for companies of similar size in the UK market ($USD5.40M).

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


Leadership Team

NamePositionTenureCompensationOwnership
William White
CEO & Director2.25yrsCA$10.85m0.0033% CA$1.5m
Thomas Flynn
Chief Financial Officer9yrsCA$3.64m0.0027% CA$1.2m
David Casper
Group Head of North America Commercial Banking10yrsCA$5.72m0.00054% CA$245.4k
Cameron Fowler
President of North American Personal & Business Banking11.17yrsCA$4.96mno data
Daniel Barclay
Head of BMO Capital Markets1.25yrsCA$6.51m0.00050% CA$227.3k
Steve Tennyson
Chief Technology & Operations Officer1.25yrsno data0.00039% CA$177.3k
Jill Homenuk
Head of Investor Relationsno datano datano data
Simon Fish
General Counsel11.83yrsno datano data
Catherine Roche
Head of Marketing & Strategyno datano datano data
Mona Malone
Chief Human Resources Officer and Head of People & Culture0.83yrno data0.00030% CA$136.4k

5.6yrs

Average Tenure

Experienced Management: 0UKH's management team is seasoned and experienced (5.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
William White
CEO & Director2.25yrsCA$10.85m0.0033% CA$1.5m
George Cope
Independent Chairman of the Board13.67yrsCA$230.00k0.0040% CA$1.8m
Christine Edwards
Independent Director9.58yrsCA$393.19k0.00052% CA$236.4k
Philip Orsino
Independent Director20.67yrsCA$230.00k0.014% CA$6.3m
J. Robert Prichard
Non-Executive Independent Chairman8yrsCA$643.49k0.0018% CA$818.1k
Donald Wilson
Independent Director12yrsCA$315.00k0.0047% CA$2.1m
Eric La Flèche
Independent Director8yrsCA$215.00k0.0011% CA$495.4k
Sophie Brochu
Independent Director9yrsCA$215.00k0.000080% CA$36.4k
Ronald Farmer
Independent Director16.25yrsCA$295.00k0.0018% CA$818.1k
Janice Babiak
Independent Director7.42yrsCA$300.00k0.000080% CA$36.4k

9.3yrs

Average Tenure

63yo

Average Age

Experienced Board: 0UKH's board of directors are considered experienced (9.3 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: 0UKH 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: 0UKH
  • Exchange: LSE
  • Founded: 1817
  • Industry: Diversified Banks
  • Sector: Banks
  • Market Cap: CA$45.452b
  • Shares outstanding: 639.63m
  • 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 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, and specialized banking programs for small business and commercial banking customers. It also offers wealth management products and services, such as investment and wealth advisory services; digital investing services; financial services and solutions to high net worth and ultra-high net worth clients; and investment management, and trust and custody services to institutional, retail, and high net worth investors. In addition, the company provides life insurance, accident and sickness insurance, and annuity products to brokers and individuals; creditor and travel insurance to bank customers; and reinsurance solutions. Further, it offers investment and corporate banking services, including client’s debt and equity capital-raising services, as well as loan origination and syndication, balance sheet management, and treasury management; strategic advice on mergers and acquisitions, restructurings, and recapitalizations, as well as valuation and fairness opinions; and trade finance, risk mitigation, and other operating services. Additionally, the company provides research and access to markets for institutional, corporate, and retail clients; new product development and origination services, as well as risk management advice and services to hedge against fluctuations; and funding and liquidity management services to its clients. The company was founded in 1817 and is headquartered in Montreal, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/31 23:15
End of Day Share Price2020/03/25 00:00
Earnings2020/01/31
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.