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 55 (better than 55% 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 54 (better than 54% of alternatives), are safely financed (Safety Rank of 77, which means low debt burdens), but show below-average growth (Growth Rank of 23). ...read more

RECOMMENDATION: A Combined Rank of 55, 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 54) but low growth (Obermatt Growth Rank of 23) while being safely financed (Obermatt Safety Rank of 77), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 54% 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	54
Growth Rank	23
Safety Rank	77
Combined Rank	55

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

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

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

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	54
GROWTH
GROWTH	96	83	76	23
SAFETY
SAFETY	94	55	33	77
SENTIMENT
SENTIMENT	n/a	76	35	^new
360° VIEW
360° VIEW	n/a	100	63	^new

Most recent update of the stock research: 2-May-2024. Financial reporting date used for calculating ranks: 31-Dec-2023. Stock research history is based on the Obermatt Method. The higher the rank, the better Bank of Montreal is in the corresponding investment strategy.
Upgrade to a Premium Account to access the latest ranks.

Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	28	91	71	54
GROWTH
GROWTH	96	83	76	23
SAFETY
SAFETY	94	55	33	77
COMBINED
COMBINED	87	100	71	55

Last update of combined financial performance: 2-May-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 54 (better than 54% compared with alternatives), Bank of Montreal shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Bank of Montreal. Price-to-Sales (P/S) is 58, which means that the stock price compared with what market professionals expect for future sales is lower than for 58% of comparable companies, indicating a good value concerning Bank of Montreal's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 55% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 82 (dividends are expected to be higher than 82% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 83% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for Bank of Montreal to 17. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 54, is a buy recommendation based on Bank of Montreal's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner in assets than its competitors. For instance, the company could be leasing its production facilities or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the three good value ranks for Sales, Profits, and Dividends are reliable indicators for the stock price value. 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	58
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	32	85	71	55
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	22	30	38	17
DIVIDEND YIELD
DIVIDEND YIELD	58	95	87	82
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	28	91	71	54

Last update of Value Rank: 2-May-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 23 (better than 23% 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 half of the indicators below and half above average for Bank of Montreal. Sales Growth has a rank of 52, which means that, currently, professionals expect the company to grow more than 52% of its competitors. Profit Growth with a rank of 56 is also above average. But Capital Growth has only a rank of 31, and Stock Returns with 25 are also below-average. Stock returns for Bank of Montreal have recently been below 75% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 23, is a sell recommendation for growth and momentum investors. Are investors forecasting troubles based on the lack of operating investment activity at the company? This could be one explanation as to why stock returns are low. But stock returns can also be the result of correcting an error in the past, in this case, an overly optimistic outlook on the future, which is now more realistic. The Value Ranks may confirm such a picture. The more important growth indicators are revenues and profits, which are both above average for Bank of Montreal. This is a positive sign from the company's operational side and may give investors courage, despite the poor recent stock price performance. 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 the Obermatt Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	66	70	78	52
PROFIT GROWTH
PROFIT GROWTH	45	16	66	56
CAPITAL GROWTH
CAPITAL GROWTH	n/a	73	58	31
STOCK RETURNS
STOCK RETURNS	86	87	67	25
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	96	83	76	23

Last update of Growth Rank: 2-May-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 77 (better than 77% compared with alternatives) for 2024, the company Bank of Montreal has safe financing practices, which means that their overall debt burden is low. 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 93, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 93% of its competitors. Liquidity is also good at 74, meaning the company generates more profit to service its debt than 74% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 12, which means the company has an above-average debt-to-equity ratio. It has more debt than 88% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 77 (better than 77% compared with alternatives), Bank of Montreal has a financing structure that is significantly 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	12
REFINANCING
REFINANCING	64	53	62	93
LIQUIDITY
LIQUIDITY	74	92	56	74
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	94	55	33	77

Last update of Safety Rank: 2-May-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: 2-May-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Bank of Montreal.
Upgrade to a Premium Account to access the latest ranks.