BMO Investment Analysis Report & Stock Research, Bank of Montreal

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Bank of Montreal (BMO)

BMO Stock Report

2-Year Price History

Recent Price
(6/26 4:02PM) +2.7%
$42.50
52-Week Price
$19.32 - $49.52
Market Capitalization
$22.9 Billion
Dividend Yield
5.50%
Most Recent Dividend
$2.83

Ockham's Rating

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BMO Revenue

As a value investing shop, we are interested in seeing how BMO's revenues measure up against past performances. One easily understandable way of doing that is to compare Price to Sales per share levels over a given time frame. Assuming it is available, Ockham prefers to look at ten years of history (for this stock there are 10 years of history available) and we weigh recent years more heavily. This allows us to find weighted average historical high and low Price to Sales ratios, which give us a better idea of the stock's current underlying value. Using this method, we have established a high range for Price to Sales of 1.84x and the low end of the range at 1.27x.

With respect to these historically rational metrics, notice that the current Price to Sales per share ratio for BMO of 1.91x is well above its historical average. This means that BMO looks relatively expensive compared to its historical Price to Sales average, and thus it is more difficult to believe that there is significant price appreciation potential. In order for the stock to become more attractive, we would like to see a decline in the Price to Sales ratio of 23% just to return BMO to its historical average.

BMO Cash Earnings

Looking at BMO specifically in their Cash Earnings capabilities, Ockham views BMO as above its historical average multiple of Cash Earnings. Looking at the last 10 years we can get a good understanding of what investors have grown to expect from BMO. For example, BMO's Cash Earnings ratio per share has fluctuated between 10.27 and 15.31 over this historical timeframe. This range is based upon a proprietary weighted methodology at Ockham, but can clearly show an investor where BMO is with respect to prior business periods.

So when we look at BMO, what does this slightly higher than historical level of Price to Cash Earnings mean? From the Ockham perspective, it basically represents that the market has a higher stock price attributed to this level of Cash Earnings than compared to normal. So while we view this as a negative from a valuation perspective, it certainly doesn't mean that BMO couldn't rapidly improve in its value from other factors or a decline in stock price. The current Price to Cash Earnings level of 13.32 is 4% above the historical norm as calculated at Ockham. So a decline in stock price, or more hopefully, an increase in BMO's Cash Earnings levels would improve our outlook for the stock.

BMO Dividends

When determining a company's future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn't imperative for BMO to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis.

The estimated annual dividend for BMO is $2.33 producing a current dividend yield of 5.48%. Much like our evaluation of Sales and Cash Earnings per share, we review dividend yields from BMO against the historic high and low levels over all available dividend history. Because dividends are a decision made exclusively by management, we view a healthy and rising dividend as a sign of confidence and strength. The highest dividend yield from BMO over previous years was 12.06% while the lowest dividend yield was 2.29%. While it is quite common for a growth stock to pay no dividend at all, but for a mature company such as BMO that has a history of paying dividends it is disappointing to see their dividend yield drop so significantly. At this time, the current dividend yield is 23.62% below the median yield.

Peer Comparison

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Bank of Montreal Industry Grouping

(6/26/2009)
Company Ticker Market Cap (Ml) Latest
Price
Price/Cash Earnings Price/Sales 5-Yr. Rev.
Growth Rate
5-Yr.
Avg. ROE.
Current 10-Yr. Range* Current 10-Yr. Range*
Peer Company Averages (not incuding BMO) 14.29 5.60 » 40.42 1.85 0.72 » 4.17 27.10% 17.13%
*10 year range does not include current year values
Itau Unibanco Banco Multiplo SA - Pfd Shs Sponsored ADR Repr 1 Pfd Share ITUB $23.1 Billion $16.01 11.27 4.06 » 18.23 1.94 0.50 » 3.57 34.59% 26.36%
Bank of Montreal BMO $22.9 Billion $42.50 13.32 6.55 » 21.53 1.91 0.62 » 2.20 10.63% 15.86%
Banco Bradesco SA ADS BBD $22.9 Billion $14.89 9.73 4.00 » 16.53 1.74 0.27 » 3.25 26.99% 23.56%
State Street Corp. STT $21.0 Billion $48.33 12.17 6.65 » 37.19 1.73 0.93 » 3.74 18.79% 13.48%
PNC Financial Services Group PNC $17.5 Billion $39.40 18.07 7.00 » 58.00 1.65 1.39 » 3.47 10.15% 13.80%
ICICI Bank Ltd. ADS IBN $17.2 Billion $30.89 20.19 6.27 » 72.15 2.21 0.52 » 6.82 45.00% 8.44%
>
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The latest TV Media Discussion

9:43:56 AM BMO $40.26 Bank of Montreal
12 days ago (06/16)
“…Robert gray has those at the fox talk about gold before the open. Let's look at goldcorp. Gg the symbol there raise today an outperform at bmo. BANK OF MONTREAL. Shares jumping up higher by several percent and packers, trades over on the nasdaqment a truck maker, probably know the peter built or kenworth names …” …more details…
9:44:01 AM BMO $36.45 Bank of Montreal
5/18/2009 9:44 AM
“…This morning, upgrade of bank of u.S. Bank, ewbc and abcb all being upgraded, all in the regional space by BANK OF MONTREAL, bmo. Use your discretion. Financials are hot here this the second best-performing sector is discretionary space. Number of up gratds. …” …more details…
6:46:26 PM BMO $37.36 Bank of Montreal
Mad Money
5/12/2009 6:46 PM
“…I've had a nice piece by henry kravitz's wife the other day talking about how the canadian banks it wasn't more regulation I actually disagree. I think the environment is so stern there that these banks didn't screw up. I like bmo. I want to buy it here. I want to pull the trigger. I'm taking more calls. I'm going to della in della. >> caller: hi, jim. Boo-yah from carlsbad. >> carlsbad. Boy, I tell you, i'd rather be …” …more details…
6:46:04 PM BMO $37.36 Bank of Montreal
Mad Money
5/12/2009 6:46 PM
“…That's the goal of the show, to a lot of people laugh at the entertainment component, but all my great teachers always entertained me. >> caller: well, i'm a teacher too, and you've really influenced my teaching. I'd like your opinion on bmo. BANK OF MONTREAL. >> oh, my friend, you have now gone into the area of banks that I like a ton, and that is the there's a lot of controversy. I've had a nice piece by henry …” …more details…
5:14:17 PM BMO $37.36 Bank of Montreal
Fast Money
5/12/2009 5:14 PM
“…We talked about agrium jumping up yesterday with cf. Take a look at mosaic today. The september 55 calls, they trade over 9,000 of these. This stock was on fire. They're going to be speaking to the bmo agricultural conference on thursday. There's your catalyst for why building positions to the up side, expecting more out of the ag names, despite the fact they were on fire today already. …” …more details…
1:06:20 PM BMO $38.27 Bank of Montreal
5/8/2009 1:06 PM
“…More than 5%. An even better story going on here. The company needs about a billion dollars in capital but the company getting upgraded by bmo, morgan keegan. Said incremental clarity from the stress test and its capital plan is lending investors to believe that die lution will not be happening for investors. …” …more details…
10:15:44 AM BMO $37.67 Bank of Montreal
5/8/2009 10:15 AM
“…7% on a year to date basis. The stock is at levels it hasn't seen since the second week of january. It's being triple upgraded this morning by bernstein, morgan keegan, and BANK OF MONTREAL. Also, in the stress test pile with upgrades, safe street, a buy from neutral at bank of 7% higher. It's had a good run itself. Not tea party time but …” …more details…
1:39:17 PM BMO $31.97 Bank of Montreal
4/22/2009 1:39 PM
“…>> we did see -- we moved ove to a new contract today so there's technical trading issues in here as well, stuart. Talking to strtrategists though, talked to george at bmo capital, he said you're gonna see people repositioning themselves now in he's expecti to see crude not only crater but to go even lower than we saw earlier this year, …” …more details…
3:00:21 PM BMO $27.90 Bank of Montreal
4/2/2009 3:00 PM
“…New hybrid blackberry with touch screen and keypad is coming to verizon. More on cnbc.Com. >>> aig has sold its aig life of canada to bmo financial for $263 and hartford steam boiler to munich re group for $739 >>> the financial accounting standards board is relaxing amark-to-market accounting one of the primary reasons we're seeing this rally. …” …more details…
9:44:29 AM BMO $26.89 Bank of Montreal
3/27/2009 9:44 AM
“…Removed it from the conviction sell list raises price target. And international paper shares are also in the red. Bmo cut its rating on the former dow component to underperform from outperform. It's down about 61/2%. Let's check in with robert gray, more of the latest headlines. Good morning, again robert. Robert: alexis, thanks so much. …” …more details…
12:03:39 PM BMO $24.47 Bank of Montreal
3/13/2009 12:03 PM
“…Look at that. It's down another 4% today. Oracle and yahoo! Are also in look at apple as well because the estimates were reduced below consensus by the firm bmo capital today. They are still keeping the outperform rating and the price target as maintained at $105 though they do cite weaker …” …more details…
10:04:44 AM BMO $25.34 Bank of Montreal
3/13/2009 10:04 AM
“…Large cap technology shares. Microsoft keeping us down a bit as is research in motion which is still down 2 1/2%. Apple shares up about 0.5%. Even though bmo capital has reduced the estimate. They do keep the price target maintained at $105. Google, yahoo! Intel all with fractional losses. …” …more details…
9:33:39 AM BMO $25.33 Bank of Montreal
3/13/2009 9:33 AM
“…And show you the picture this morning. But the nasdaq down 0.3%. Some of the techs have opened apple shares are down 5.5%. Bmo capital reduced the conweight on consensus. They still maintain the but microsoft is off by about fractional loss for google here. Yahoo! Shares down about 1%. …” …more details…
9:04:26 AM BMO $21.03 Bank of Montreal
3/13/2009 9:04 AM
“…Buy list. Let me make one note on apple quickly, as I mentioned, it is fractionally to the down side today. Estimates were reduced below consensus over at bmo capital. The price target there is maintained $105. Pmc a nice winner, palm is up an upgrade over at rbc as well. …” …more details…
6:54:07 PM BMO $21.03 Bank of Montreal
Mad Money
2/24/2009 6:54 PM
“…Here is one from troy. Jim, I know what you think about a lot of u.S. Banks but there seems to be some great buys north of the border with BANK OF MONTREAL at around 10% return and rbc at 7.5%. I'm wondering what you think of …” …more details…
6:11:26 PM BMO $24.01 Bank of Montreal
Mad Money
2/12/2009 6:11 PM
“…>> from a transplant canadian brother, I need your help. >> sure. It's a good place and I can do it right here. Financials, bank montreal, bmo. I know it's being hit, but all -- everything's going on in the financial market, do I hold, coy sell? >> I am not recommending any …” …more details…
9:54:42 AM BMO $24.04 Bank of Montreal
1/22/2009 9:54 AM
“…Stock and 40% in cash, reits paying out dividends with shares of stocks instead of all cash, joining us now a senior analyst at bmo capital markets economy research group. Good to have you. >> thanks for having me. Alexis: perhaps it's a trend. What do you make of that >> sure, well, reits have always been able to pay part of their …” …more details…
View All Bank of Montreal News

Key Fundamentals

BMO - Bank of Montreal Fundamentals
Price (6/26 4:02PM) $42.50
Volume (6/26 4:02PM) 632,448
Last Close Price $41.38
10 Day Average Volume 532,900
13 Week Price Range $24.74 - $42.68
52 Week Price Range $19.32 - $49.52
LTM Revenue $17.3 Billion
 
Shares Outstanding (10/2008) 539.7 Million
Market Capitalization $22.9 Billion
Shares Held By Institutions 285.1 Million
Institutional Holders 298
% Shares Held By Institutions 52.30%
Earnings Per Share (EPS) $3.13
P/E Ratio 12.50
Book Value Per Share $26.18
 
Gross Margin n/a%
Annual Dividend 2.33
Dividend Yield 5.50%
Beta 1.30
Fiscal Year Ends October

About Bank of Montreal

Bank of Montreal is considered to operate in the Financial sector. They specifically operate in the Foreign Money Center Banks business segment contained within the Banking industry.

The Company offers a range of credit and non-credit products and services directly and through Canadian and non-Canadian subsidiaries.

NASDAQ 1838.22

8.68  0.47%
S&P; 500 918.9

-1.36  -0.15%
^DIA 84.27

-0.45  -0.53%