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Are You Looking for a High-Growth Dividend Stock? Bank of Montreal (BMO) Could Be a Great Choice
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All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Bank of Montreal in Focus
Bank of Montreal (BMO - Free Report) is headquartered in Toronto, and is in the Finance sector. The stock has seen a price change of 12.57% since the start of the year. Currently paying a dividend of $1.05 per share, the company has a dividend yield of 3.45%. In comparison, the Banks - Foreign industry's yield is 3.2%, while the S&P 500's yield is 1.47%.
Looking at dividend growth, the company's current annualized dividend of $4.19 is up 24.1% from last year. Bank of Montreal has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 4.99%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Bank of Montreal's current payout ratio is 38%, meaning it paid out 38% of its trailing 12-month EPS as dividend.
BMO is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $10.65 per share, with earnings expected to increase 3.30% from the year ago period.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. It's important to keep in mind that not all companies provide a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, BMO presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #1 (Strong Buy).
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Are You Looking for a High-Growth Dividend Stock? Bank of Montreal (BMO) Could Be a Great Choice
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Bank of Montreal in Focus
Bank of Montreal (BMO - Free Report) is headquartered in Toronto, and is in the Finance sector. The stock has seen a price change of 12.57% since the start of the year. Currently paying a dividend of $1.05 per share, the company has a dividend yield of 3.45%. In comparison, the Banks - Foreign industry's yield is 3.2%, while the S&P 500's yield is 1.47%.
Looking at dividend growth, the company's current annualized dividend of $4.19 is up 24.1% from last year. Bank of Montreal has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 4.99%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Bank of Montreal's current payout ratio is 38%, meaning it paid out 38% of its trailing 12-month EPS as dividend.
BMO is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $10.65 per share, with earnings expected to increase 3.30% from the year ago period.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. It's important to keep in mind that not all companies provide a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, BMO presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #1 (Strong Buy).