Fact based stock research
Bank of Montreal (TSX:BMO)

CA0636711016

How to read the free ranks

For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Bank of Montreal stock research in summary

bmo.com

ANALYSIS: With an Obermatt Combined Rank of 66 (better than 66% compared with investment alternatives), Bank of Montreal (Diversified Banks, Canada) shares have above-average financial characteristics compared with similar stocks. Shares of Bank of Montreal are a good value (attractively priced) with a consolidated Value Rank of 90 (better than 90% of alternatives), are safely financed (Safety Rank of 69, which means low debt burdens), but show below-average growth (Growth Rank of 9). ...read more

RECOMMENDATION: A Combined Rank of 66, is a buy recommendation based on Bank of Montreal's financial characteristics. As the company Bank of Montreal's key financial metrics exhibit good value (Obermatt Value Rank of 90) but low growth (Obermatt Growth Rank of 9) while being safely financed (Obermatt Safety Rank of 69), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 90% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	90
Growth Rank	9
Safety Rank	69
Combined Rank	66

Country	Canada
Industry	Diversified Banks
Index	Human Rights, TSX Composite
Size class	XX-Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Bank of Montreal

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	28	91	71	90
GROWTH
GROWTH	96	83	76	9
SAFETY
SAFETY	94	55	33	69
SENTIMENT
SENTIMENT	n/a	76	35	^new
360° VIEW
360° VIEW	n/a	100	63	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 31-Jul-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Bank of Montreal is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	28	91	71	90
GROWTH
GROWTH	96	83	76	9
SAFETY
SAFETY	94	55	33	69
COMBINED
COMBINED	87	100	71	66

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Bank of Montreal the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 90 (better than 90% compared with alternatives) for 2024, Bank of Montreal shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Bank of Montreal. Price-to-Sales is 89 which means that the stock price compared with what market professionals expect for future sales is lower than for 89% of comparable companies, indicating a good value for Bank of Montreal's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 73% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 52. Compared with other companies in the same industry, dividend yields of Bank of Montreal are expected to be higher than for 94% of all competitors (a Dividend Yield rank of 94). ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 90, is a buy recommendation based on Bank of Montreal's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Bank of Montreal based on its detailed value metrics. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	36	77	67	89
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	32	85	71	73
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	22	30	38	52
DIVIDEND YIELD
DIVIDEND YIELD	58	95	87	94
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	28	91	71	90

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Bank of Montreal; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 9 (better than 9% compared with alternatives), Bank of Montreal shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below-average for Bank of Montreal. While Sales Growth ranks at 62, professionals currently expect the company to grow more than 62% of its competitors, while all other growth ranks are below the market median. Profit Growth has a rank of 20, which means that, currently, professionals expect the company to grow its profits less than 80% of its competitors, and Capital Growth has a low rank of 29. Historic stock returns were also below average with a current Stock Returns rank of 9 which means that the stock returns have recently been below 91% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 9, is a sell recommendation for growth and momentum investors. If revenues are expected to increase, but all other growth indicators are negative, the company may be investing in future growth through means not visible in the balance sheet and thus not reflected in capital growth. The fact that Stock Returns have been below market doesn't mean that much, as it may be due to overly optimistic investor behavior in the past, which has been corrected to a more reasonable level recently. If that were the case, a positive Value Rank would be a reason to invest because the company is still expected to grow, while stock prices are now at a more reasonable level. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance isn't stellar here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	66	70	78	62
PROFIT GROWTH
PROFIT GROWTH	45	16	66	20
CAPITAL GROWTH
CAPITAL GROWTH	n/a	73	58	29
STOCK RETURNS
STOCK RETURNS	86	87	67	9
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	96	83	76	9

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Bank of Montreal.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 69 (better than 69% compared with alternatives), the company Bank of Montreal has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Bank of Montreal is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Bank of Montreal. Refinancing is at 95, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 95% of its competitors. Liquidity is also good at 67, meaning the company generates more profit to service its debt than 67% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 8, which means the company has an above-average debt-to-equity ratio. It has more debt than 92% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 69 (better than 69% compared with alternatives), Bank of Montreal has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Bank of Montreal could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with Bank of Montreal and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	96	12	12	8
REFINANCING
REFINANCING	64	53	62	95
LIQUIDITY
LIQUIDITY	74	92	56	67
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	94	55	33	69

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Bank of Montreal and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	57	67	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	16	4	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	70	21	^new
MARKET PULSE
MARKET PULSE	n/a	86	60	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	76	35	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Bank of Montreal.
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