BANK OF MONTREAL (BMO) Stock Fundamental Analysis
NYSE:BMO - New York Stock Exchange, Inc. - CA0636711016 - Common Stock - Currency: USD
We assign a fundamental rating of 3 out of 10 to BMO. BMO was compared to 395 industry peers in the Banks industry. BMO may be in some trouble as it scores bad on both profitability and health. BMO is quite expensive at the moment. It does show a decent growth rate. Finally BMO also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year BMO was profitable.
BMO had a positive operating cash flow in the past year.
BMO had positive earnings in each of the past 5 years.
In the past 5 years BMO always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 0.55%, BMO is doing worse than 73.67% of the companies in the same industry.
Looking at the Return On Equity, with a value of 9.15%, BMO is in line with its industry, outperforming 56.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.55% | ||
| ROE | 9.15% | ||
| ROIC | N/A |
ROA(3y)0.65%
ROA(5y)0.65%
ROE(3y)10.78%
ROE(5y)10.79%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
BMO has a Profit Margin (22.37%) which is in line with its industry peers.
BMO's Profit Margin has been stable in the last couple of years.
BMO does not have Operating Margin and Gross Margin available, so we won't be analyzing them here.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | N/A | ||
| PM (TTM) | 22.37% | ||
| GM | N/A |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3Y-8.54%
PM growth 5Y-0.59%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
BMO does not have a ROIC to compare to the WACC, probably because it is not profitable.
BMO has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, BMO has more shares outstanding
BMO has about the same debt/assets ratio as last year.
2.2 Solvency
BMO has a debt to FCF ratio of 34.71. This is a negative value and a sign of low solvency as BMO would need 34.71 years to pay back of all of its debts.
BMO's Debt to FCF ratio of 34.71 is on the low side compared to the rest of the industry. BMO is outperformed by 83.80% of its industry peers.
A Debt/Equity ratio of 2.67 is on the high side and indicates that BMO has dependencies on debt financing.
With a Debt to Equity ratio value of 2.67, BMO is not doing good in the industry: 93.16% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.67 | ||
| Debt/FCF | 34.71 | ||
| Altman-Z | N/A |
ROIC/WACCN/A
WACC16.59%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
BMO shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -5.74%.
The Earnings Per Share has been growing slightly by 0.55% on average over the past years.
Looking at the last year, BMO shows a quite strong growth in Revenue. The Revenue has grown by 9.61% in the last year.
The Revenue has been growing slightly by 5.17% on average over the past years.
EPS 1Y (TTM)-5.74%
EPS 3Y-9.24%
EPS 5Y0.55%
EPS Q2Q%-1.78%
Revenue 1Y (TTM)9.61%
Revenue growth 3Y6.45%
Revenue growth 5Y5.17%
Sales Q2Q%5.67%
3.2 Future
The Earnings Per Share is expected to grow by 9.12% on average over the next years. This is quite good.
The Revenue is expected to grow by 4.06% on average over the next years.
EPS Next Y19.5%
EPS Next 2Y17.2%
EPS Next 3Y14.33%
EPS Next 5Y9.12%
Revenue Next Year10.9%
Revenue Next 2Y7.16%
Revenue Next 3Y5.61%
Revenue Next 5Y4.06%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 15.20 indicates a correct valuation of BMO.
64.56% of the companies in the same industry are cheaper than BMO, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 27.45. BMO is valued slightly cheaper when compared to this.
With a Price/Forward Earnings ratio of 11.56, the valuation of BMO can be described as very reasonable.
Based on the Price/Forward Earnings ratio, BMO is valued a bit more expensive than 61.52% of the companies in the same industry.
BMO's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.90.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.2 | ||
| Fwd PE | 11.56 |
4.2 Price Multiples
Compared to the rest of the industry, the Price/Free Cash Flow ratio of BMO indicates a slightly more expensive valuation: BMO is more expensive than 64.56% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.52 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
BMO's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
BMO's earnings are expected to grow with 14.33% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.78
PEG (5Y)27.86
EPS Next 2Y17.2%
EPS Next 3Y14.33%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.38%, BMO is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.47, BMO pays a better dividend. On top of this BMO pays more dividend than 81.27% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, BMO pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.38% |
5.2 History
The dividend of BMO has a limited annual growth rate of 4.23%.
BMO has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of BMO decreased recently.
Dividend Growth(5Y)4.23%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
62.84% of the earnings are spent on dividend by BMO. This is not a sustainable payout ratio.
The dividend of BMO is growing, but earnings are growing more, so the dividend growth is sustainable.
DP62.84%
EPS Next 2Y17.2%
EPS Next 3Y14.33%
113.21
+1.07 (+0.95%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupBanks
GICS IndustryBanks
Earnings (Last)
Earnings (Next)
Inst Owners53.29%
Inst Owner Change-1.93%
Ins Owners0.03%
Ins Owner Change0%
Market Cap81.97B
Analysts68.42
Price Target114.92 (1.51%)
Short Float %0.77%
Short Ratio8.39
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.38% |
Yearly Dividend3.88
Dividend Growth(5Y)4.23%
DP62.84%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)12.2%
Min EPS beat(2)-0.64%
Max EPS beat(2)25.04%
EPS beat(4)1
Avg EPS beat(4)-0.69%
Min EPS beat(4)-21.82%
Max EPS beat(4)25.04%
EPS beat(8)1
Avg EPS beat(8)-5.11%
EPS beat(12)2
Avg EPS beat(12)-4.48%
EPS beat(16)5
Avg EPS beat(16)-1.12%
Revenue beat(2)1
Avg Revenue beat(2)1.66%
Min Revenue beat(2)-4.08%
Max Revenue beat(2)7.39%
Revenue beat(4)1
Avg Revenue beat(4)0.34%
Min Revenue beat(4)-4.08%
Max Revenue beat(4)7.39%
Revenue beat(8)1
Avg Revenue beat(8)-1.58%
Revenue beat(12)3
Avg Revenue beat(12)-0.26%
Revenue beat(16)6
Avg Revenue beat(16)4.32%
PT rev (1m)4.75%
PT rev (3m)4.66%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.59%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.1%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.13%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.2 | ||
| Fwd PE | 11.56 | ||
| P/S | 3.17 | ||
| P/FCF | 16.52 | ||
| P/OCF | 13.24 | ||
| P/B | 1.3 | ||
| P/tB | 1.73 | ||
| EV/EBITDA | N/A |
EPS(TTM)7.45
EY6.58%
EPS(NY)9.79
Fwd EY8.65%
FCF(TTM)6.85
FCFY6.05%
OCF(TTM)8.55
OCFY7.55%
SpS35.67
BVpS87.2
TBVpS65.39
PEG (NY)0.78
PEG (5Y)27.86
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.55% | ||
| ROE | 9.15% | ||
| ROCE | N/A | ||
| ROIC | N/A | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | N/A | ||
| PM (TTM) | 22.37% | ||
| GM | N/A | ||
| FCFM | 19.21% |
ROA(3y)0.65%
ROA(5y)0.65%
ROE(3y)10.78%
ROE(5y)10.79%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3Y-8.54%
PM growth 5Y-0.59%
GM growth 3YN/A
GM growth 5YN/A
F-Score8
Asset Turnover0.02
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.67 | ||
| Debt/FCF | 34.71 | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | 77.93% | ||
| Cap/Sales | 4.76% | ||
| Interest Coverage | N/A | ||
| Cash Conversion | N/A | ||
| Profit Quality | 85.89% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score8
WACC16.59%
ROIC/WACCN/A
Cap/Depr(3y)83.95%
Cap/Depr(5y)78.69%
Cap/Sales(3y)4.93%
Cap/Sales(5y)4.5%
Profit Quality(3y)205.3%
Profit Quality(5y)443.25%
High Growth Momentum
Growth
EPS 1Y (TTM)-5.74%
EPS 3Y-9.24%
EPS 5Y0.55%
EPS Q2Q%-1.78%
EPS Next Y19.5%
EPS Next 2Y17.2%
EPS Next 3Y14.33%
EPS Next 5Y9.12%
Revenue 1Y (TTM)9.61%
Revenue growth 3Y6.45%
Revenue growth 5Y5.17%
Sales Q2Q%5.67%
Revenue Next Year10.9%
Revenue Next 2Y7.16%
Revenue Next 3Y5.61%
Revenue Next 5Y4.06%
EBIT growth 1YN/A
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-29.95%
FCF growth 3Y-13.92%
FCF growth 5Y-0.51%
OCF growth 1Y-25.2%
OCF growth 3Y-12.98%
OCF growth 5Y-0.19%