Bank of Montreal
🇨🇦 BMO.TO · Toronto · CA0636711016
Bank
CAD 189.64 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
15.0
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 189.64 ÷ 12.63 = 15.0
TTM period through: 2026-01-31
Forward P/E (estimated): 13.4
Based on analyst estimates
Reference: Provider P/E (Trailing): 15.8
Yield (Fwd)
3.52%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 3.42%
Net Debt/EBITDA (TTM)
24.3x
Latest quarter: 95.3x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2026-01-31
Latest quarter (2026-01-31): 95.3x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
52.9%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 55.9%
Cash Flow Payout (TTM): 125.7%
FCF Coverage (TTM): 0.45x
ROE
10.5%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
Summary
Bank of Montreal is a premier financial institution operating within the highly protected Canadian banking oligopoly, offering excellent long-term stability and reliable dividend coverage. While the company's fundamentals remain robust with strong revenue growth and strategic U.S. expansion, current valuation multiples (P/E 15.01) offer limited upside. Existing shareholders should maintain positions to collect the well-covered dividend, but new investors may want to monitor the stock for a better entry point with a higher starting yield.
Sector Context
Bank of Montreal is a premier financial institution offering a wide range of retail banking, wealth management, and investment banking services across North America. For banks, high Debt/Equity ratios (currently 4.75x) are a normal part of the business model as customer deposits are classified as liabilities; dividend investors should instead focus on regulatory capital, ROE, and earnings-based payout ratios within Canada's highly regulated banking oligopoly.
Temporary Opportunity Identified
Near-term margin contraction, elevated credit loss provisions tied to macroeconomic uncertainty, and minor regulatory fines.
📊 Strategy Analysis
- • Operates as a dominant player within the highly protected Canadian banking oligopoly, providing essential financial services with a stable ROE of 10.47%.
- • Sustainable dividend profile with a forward payout ratio of 52.87% and an impressive 10-year dividend CAGR of 10.7%.
- • Strategic expansion into the U.S. and new tokenized cash partnerships provide long-term revenue diversification, evidenced by a 10-year revenue growth of 257%.
⚠ What to Watch
- • Current P/E of 15.01 sits at the very top of our preferred 8-15x range, limiting immediate margin of safety.
- • The 3.42% dividend yield, while meeting minimum strategy thresholds, is historically modest for Canadian banks, limiting immediate income appeal.
- • Net margins have contracted to 11.1%, significantly below the 5-year average of 23.2%, while aggressive U.S. expansion plans introduce near-term execution risk and elevated expenses.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-04
Disclaimer: This information is for educational purposes only. Not financial advice.