# Thanks BMO - Dividend Hike



## My Own Advisor (Sep 24, 2012)

Thanks BMO!

Dividend hike today:
http://www.theglobeandmail.com/report-on-business/bmo-hikes-dividend-as-profit-dips/article9057432/


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## doctrine (Sep 30, 2011)

One analyst predicted all five will raise dividends this week. RY, BNS and TD will almost for sure. CIBC has only been raising their dividend annually for the last two years, so this could be a return to the twice-annual dividend increases. National Bank won't this week, because they raise them on the opposite quarters.

Nice to see BMO's US bank have +13% earnings this year. They account for about 20% of their revenue and profits.


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## My Own Advisor (Sep 24, 2012)

I read that as well...all five are expected to raise dividends. Good news for investors.


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## 1sImage (Jan 2, 2013)

Right on... right on... right on for raising dividends. 

Nice to hear.


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## gibor365 (Apr 1, 2011)

And all 6 bank are cheap, p/e 8-10, payout ratio is good...


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## The Dude (Feb 8, 2013)

yes thanks bmo , all the analyst were saying that bmo was going to be the only bank to not raise the dividend.That showed them lol


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## jamesbe (May 8, 2010)

Dividend goes up typically means a drop in price... at least for the short term. Odd really.


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## Four Pillars (Apr 5, 2009)

jamesbe said:


> Dividend goes up typically means a drop in price... at least for the short term. Odd really.


I don't think so.


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## Echo (Apr 1, 2011)

jamesbe said:


> Dividend goes up typically means a drop in price... at least for the short term. Odd really.


Don't you mean when the dividend is actually paid out? This was just an announcement that the divvy would go up in the future.


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## Ethan (Aug 8, 2010)

jamesbe said:


> Dividend goes up typically means a drop in price... at least for the short term. Odd really.


I call that a "buying opportunity" 

I didn't buy any BMO yesterday, although I did sell a naked put.


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## HaroldCrump (Jun 10, 2009)

jamesbe said:


> Dividend goes up typically means a drop in price... at least for the short term. Odd really.


It's not entirely odd...the way markets perceive a dividend hike (esp. if the payout ratio is high as well), is that the company can't find any other avenues for investing their returns.
Which means they are not planning to expand their business, or invest in new businesses.

The share price movement as a result of dividend hikes often gets lost in all the market noise, but all else being equal, a dividend hike often means a slight drop in share price.
It is also a factor of what multiple the market is willing to pay for that dividend cash flow.


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## andrewf (Mar 1, 2010)

The banks do look cheap. I wonder how the ongoing slowdown in credit growth in Canada will affect them.


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## The Dude (Feb 8, 2013)

some say BMO should be around $80 a share


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## doctrine (Sep 30, 2011)

Canadian residential credit is less of a % of their revenue than you might think. Most of them are predicting even revenues in that sector, so they are still making money and can even grow earnings by cutting costs. Plus, all other sectors are up. Commerical loans are still growing. And, many of them have business in other countries, if not actual branches then corporate activity like capital markets. As the banks are already priced at P/Es of 8-12, earnings growth or 5% or less is all that is required to maintain or even slightly improve the stock price and support 5% annual dividend increases. 4-4.5% yield plus 5% growth is a lot better than inflation.


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## praire_guy (Sep 8, 2011)

Echo said:


> Don't you mean when the dividend is actually paid out? This was just an announcement that the divvy would go up in the future.


This is old news. I think last November. The dividend was paid today.


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## Ethan (Aug 8, 2010)

praire_guy said:


> This is old news. I think last November. The dividend was paid today.


A $0.72 dividend was paid today. Yesterday's announcement was that the next dividend will be increased by $0.02 to $0.74.


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## praire_guy (Sep 8, 2011)

3rd paragraph says "BMO also announced a surprise dividend increase, boosting its quarterly payout by 2 cents to 72 cents"

Didn't they already do that?


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## praire_guy (Sep 8, 2011)

Ethan said:


> A $0.72 dividend was paid today. Yesterday's announcement was that the next dividend will be increased by $0.02 to $0.74.


Are you sure? I googled bmo and all I could find was the 70 to 72 increase which is old news. 

Of course I'm happy to hear an increase to 74 a share as food news.


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## doctrine (Sep 30, 2011)

Wondering about the dividend? Just go right to the source.

http://newsroom.bmo.com/press-relea...-declares-dividend-tsx-bmo-201302260855813006

Bank of Montreal (TSX:BMO)(NYSE:BMO) today announced that the Board of Directors declared a quarterly dividend of $0.74 per share on paid-up common shares of Bank of Montreal for the second quarter of fiscal year 2013, an increase of $0.02 from the previous quarter.


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## MrMatt (Dec 21, 2011)

I hate how many of the stock news lists are incomplete and show old news.

I've registered through some companies Investor Relations news alerts for emails, but I hate doing that at EVERY company I'm interested in.
Does anyone know if there is a reliable site that will do this for any (or most) companies?


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## m3s (Apr 3, 2010)

MrMatt said:


> I've registered through some companies Investor Relations news alerts for emails, but I hate doing that at EVERY company I'm interested in.
> Does anyone know if there is a reliable site that will do this for any (or most) companies?


Google portfolios shows all the news reported on the tickers in the portfolio. You can subscribe to an RSS feed of any news google finds with whatever ticker, from any news source. That's probably the most universal.. you can also sync up dates from the stock to a calendar


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## humble_pie (Jun 7, 2009)

just wondering. I only know 2 discount brokers. But both have superb, complete newsfeeds from several sources. Why would a discount investor need anything else.

i do understand that it's possible that deep discount brokers - the VBs, IBs, jitneys & questrades - don't offer these feeds. But surely all the bank-owned brokers do ?

news releases do not proceed directly from any publicly-traded company to anybody, anywhere, ever. All news releases from publicly-traded companies in north america are first sent in draft form to their primary exchange where they are read, approved or rejected. Most, of course, are approved. In canada approval is granted by a division of the TSX.

the instant approval is forthcoming, each release is distributed by one of a handful of professional wire service companies such as Canada Newswire or Business Wire. Distribution is instant & goes to literally thousands of media, institutions, brokers, you name it. This is to comply with the regulations that material information must be disclosed to all shareholders, everywhere, at exactly the same time.

the obverse of this regulation is that it's illegal to disclose material information to certain individuals who become termed insiders, whether or not they have a majority holding in shares of a particular company.

companies pay the wire services to disseminate their news releases massively, reliably & simultaneously in order to satisfy the regulations against insider disclosure.

long story short, your tdw broker, your roybank broker or your bmo broker is going to receive those news releases & display them to their investor clients just as fast as can the company itself. Probably, in fact, faster.


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## Sampson (Apr 3, 2009)

humble_pie said:


> your roybank broker [...] is going to receive those news releases & display them to their investor clients just as fast as can the company itself. Probably, in fact, faster.


They just upgraded their system, and it is really nice. I don't personally look for immediate to the minute news releases but they have improved things from before. Never compared with TDW though.


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## Jungle (Feb 17, 2010)

This is a nice inflation raise.  
I would also like to thank Bmo's competitor, RY and TD, for raising dividend 5% today. 
Next up: BNS.


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## MrMatt (Dec 21, 2011)

Google portfolios don't show all the news items in chronological order.
Which makes it easy to miss something.

I'm looking for something better.


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## gibor365 (Apr 1, 2011)

Looks like BMO had a solid Quarter, hiked dividends..... surprised to see it almost 4% down.... maybe good time to add some shares?


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## Canadian (Sep 19, 2013)

It's below its moving averages right now. I think this is a buying opportunity! Along with the dividend hike, they are continuing with share buybacks.


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## FrugalTrader (Oct 13, 2008)

BMO is down because Royal Bank called them out on their earnings. It appears that after removing special tax items, they actually missed earnings. 



> RBC calling $BMO EPS a MISS. Came in at $1.64/sh vs. $1.58/sh expected BUT when strip out tax security gain of $0.19 = MISS.


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## humble_pie (Jun 7, 2009)

gibor said:


> almost 4% down.... maybe good time to add some shares?


i don't think so


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## Eder (Feb 16, 2011)

I would need below $60 to add...maybe this summer after tapering freaks out everyone. But the divy increase is nice....really all I care about here. I doubt its worth 2 billion $ less since yesterday...the market is a bit silly I think.


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## gibor365 (Apr 1, 2011)

humble_pie said:


> i don't think so


Can you expand?


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## swoop_ds (Mar 2, 2010)

Eder said:


> I would need below $60 to add...maybe this summer after tapering freaks out everyone. But the divy increase is nice....really all I care about here. I doubt its worth 2 billion $ less since yesterday...the market is a bit silly I think.


The market, silly?? Proposterous!


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## HaroldCrump (Jun 10, 2009)

Job cuts at BMO hitting the newswires too...nearly a 1,000.

The earnings report was not good news at all.
There was a very short-lived initial euphoria around 8:30 am when the earnings report first came out, esp. due to the dividend hike.
But reality set in quickly.


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## doctrine (Sep 30, 2011)

Some perspective: BMO has returned 20% year to date after today's drop. Probably would have required a blow-out to raise expectations of another 20% return in the next 9-12 months, instead of a relatively flat quarter. I would say the US earnings disappointed a bit as well. I have been surprised to see the run-up that BMO has had this year, which has been amongst the largest of all the banks, but without some of the earnings increases at the other banks. Still holding and appreciate the higher dividend!

$4.2B in annual profit is also not something to sneeze at. That puts them at a P/E just under 11 with revenue and earnings growth of 5%. Solid, as I expect most of the banks to be this week.


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## My Own Advisor (Sep 24, 2012)

"$4.2B in annual profit is also not something to sneeze at."

Solid.


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## humble_pie (Jun 7, 2009)

gibor said:


> Can you expand?


it's been almost 5 years now, a non-stop bull market in canadian banks. They've tripled since early 2009 lows. Probabilities are dwindling that this can continue.

meanwhile some analysts like nobel laureate shiller are saying boom coming over, look out below.

for me, it's not a time to buy banks, it's not a time to sell bank puts. However, neither is it a time to sell bank stocks imho.

what is it a time for? i think it's time to sell a few bank calls


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## Cal (Jun 17, 2009)

BMO’s results included rising provisions for bad loans and a deteriorating outlook for U.S. personal and commercial banking. More here:

http://www.theglobeandmail.com/repo...ntinue-share-buyback-program/article15734298/


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