New Stock Purchase: Bank of Montreal (BMO.TO)

Hey guys! I purchased a new stock today. About a year ago, I mentioned  about my plans to invest more money in Canadian banks. Since then I bought Laurentian Bank, TD, RBC, and CIBC. So now it’s the turn to buy the Bank of Montreal (BMO.TO). Since I live in Montreal, I got to have some shares of BMO.





Just kidding. Just because I live in Montreal, doesn’t mean I need to own BMO. My decision was based on compelling valuation. At the moment, I believe that BMO is the best buy among its peers. BMO trades at 10.25 price-to-earnings ratio, pays 4.25% dividend yield and the payout ratio is in low 40’s. The Bank of Montreal has paid the dividend for 190 consecutive years! They usually raise the dividend twice a year and I believe they will continue to raise that dividend going forward.

I had enough money to buy 11 shares of BMO at $96.79 per share. Not too low, but not to high either. The one-year price range for BMO is between $86 and $106. So at $96, I’m right in the middle of the range. Eleven shares is a small lot, therefore I may continue to add BMO shares on weakness until I hit a full position. I would like to own around 50 shares.

At the moment, BMO pays a quarterly dividend of $1.03 per share. This purchase will add $11.33 per quarter or $45.32 per year.

Let me know what you think about this purchase and about BMO in general. Do you own BMO?

4 comments:

  1. Like the buy. I own three Canadian stocks for some time, TD, BNS and RY with BMO and CM as potential buys one day. Solid Canadian banking play. Nice!

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    1. Thanks, mate! Can't go wrong with Canadian Banks. They are solid businesses.

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  2. Nice German

    swore I commented on this before. I own bmo as well, got to love their dividend history.

    keep stacking those divs man
    cheers

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    1. Yeah, the dividend history is very impressive! 190 years! Can't go wrong with that!

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