Yahoo Finance Bank of Montreal (TSE:BMO) Is Increasing Its Dividend To CA$1.47
Bank of Montreal's (TSE:BMO) dividend will be increasing from last year's payment of the same period to CA$1.47 on 28th of August. The payment will take the dividend yield to 4.9%, which is in line with the average for the industry.
See our latest analysis for Bank of Montreal
Bank of Montreal's Payment Expected To Have Solid Earnings Coverage
We aren't too impressed by dividend yields unless they can be sustained over time.
Bank of Montreal has a long history of paying out dividends, with its current track record at a minimum of 10 years. Taking data from its last earnings report, calculating for the company's payout ratio shows 57%, which means that Bank of Montreal would be able to pay its last dividend without pressure on the balance sheet.
The next 3 years are set to see EPS grow by 33.6%. Analysts forecast the future payout ratio could be 51% over the same time horizon, which is a number we think the company can maintain.
Bank of Montreal Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. The annual payment during the last 10 years was CA$2.88 in 2013, and the most recent fiscal year payment was CA$5.88. This works out to be a compound annual growth rate (CAGR) of approximately 7.4% a year over that time. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.
Bank of Montreal Could Grow Its Dividend
Investors could be attracted to the stock based on the quality of its payment history. Bank of Montreal has seen EPS rising for the last five years, at 6.4% per annum. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.
We Really Like Bank of Montreal's Dividend
Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. As an example, we've identified 2 warning signs for Bank of Montreal that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
