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 94 (better than 94% compared with investment alternatives), Bank of Montreal (Diversified Banks, Canada) shares have much better financial characteristics than comparable stocks. Shares of Bank of Montreal are a good value (attractively priced) with a consolidated Value Rank of 83 (better than 83% of alternatives), show above-average growth (Growth Rank of 69) but are riskily financed (Safety Rank of 49), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 94, is a strong buy recommendation based on Bank of Montreal's financial characteristics. As the company Bank of Montreal's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 83) and above-average growth (Obermatt Growth Rank of 69), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 49) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. 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	83
Growth Rank	69
Safety Rank	49
Combined Rank	94

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

19-Dec-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	83
GROWTH
GROWTH	96	83	76	69
SAFETY
SAFETY	94	55	33	49
SENTIMENT
SENTIMENT	n/a	76	35	^new
360° VIEW
360° VIEW	n/a	100	63	^new

Most recent update of the stock research: 19-Dec-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	83
GROWTH
GROWTH	96	83	76	69
SAFETY
SAFETY	94	55	33	49
COMBINED
COMBINED	87	100	71	94

Last update of combined financial performance: 19-Dec-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 83 (better than 83% 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, with three out of four indicators above average for Bank of Montreal. Price-to-Sales (P/S) is 82, which means that the stock price compared with what market professionals expect for future sales is lower than for 82% 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 63% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 94 (dividends are expected to be higher than 94% 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 60% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for Bank of Montreal to 40. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 83, 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	82
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	32	85	71	63
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	22	30	38	40
DIVIDEND YIELD
DIVIDEND YIELD	58	95	87	94
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	28	91	71	83

Last update of Value Rank: 19-Dec-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 69 (better than 69% compared with alternatives), Bank of Montreal shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Bank of Montreal. Sales Growth has a value of 57 which means that currently professionals expect the company to grow more than 57% of its competitors. Profit Growth with a value of 83 and Capital Growth with a rank of 79 means that currently, professionals expect the company to grow both profits and invested capital more than of its competitors. But Stock Returns has only a rank of 17, which means that stock returns have recently been below 83% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 69, is a buy recommendation for growth and momentum investors. Bank of Montreal has only one below-average growth indicator, the stock returns. This is probably the least reliable growth indicator, because it measures company and investor expectations at the same time. The three other growth indicators, which are all positive for Bank of Montreal, are more reliable measures of growth momentum. For this reason, the company seems to be on a good trajectory, unless you think the current period is not representative, because of unique events that will not be repeated in the future. 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. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	66	70	78	57
PROFIT GROWTH
PROFIT GROWTH	45	16	66	83
CAPITAL GROWTH
CAPITAL GROWTH	n/a	73	58	79
STOCK RETURNS
STOCK RETURNS	86	87	67	17
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	96	83	76	69

Last update of Growth Rank: 19-Dec-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 49 (better than 49% compared with alternatives), the company Bank of Montreal has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Bank of Montreal is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, 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 65, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 65% 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 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 49 (worse than 51% compared with alternatives), Bank of Montreal has a financing structure that is riskier 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	65
LIQUIDITY
LIQUIDITY	74	92	56	74
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	94	55	33	49

Last update of Safety Rank: 19-Dec-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: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Bank of Montreal.
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