Financial Performance
Bank of Montreal (TSX:BMO) reported net income of $2,330 million and earnings per share (EPS) of $3.14, up from $1,865 million and $2.48, respectively, in the same period last year. On an adjusted basis, net income rose to $2,399 million and adjusted EPS to $3.23, compared to $1,981 million and $2.64 a year ago.
Management noted: “BMO delivered another quarter of strong earnings growth, with solid revenue performance and good expense management. Disciplined execution of our ROE rebuild strategies is yielding tangible results through consistent positive operating leverage, improving credit performance, and enhanced profitability—particularly within our U.S. operations.”
Investment Case
Top Canadian banks are well-regarded for delivering consistent dividend income, and one financial powerhouse leads the pack with an unmatched record—having paid dividends for 196 consecutive years. Over the past 15 years, BMO’s dividend has grown at a compound annual growth rate (CAGR) exceeding 5%.
This leading financial institution continues to grow its loan and deposit base, providing a solid foundation for future earnings and continued dividend distributions. With diversified revenue streams, strong credit performance, and improving operational efficiency, BMO is well-positioned for sustainable growth. It currently offers a dividend yield of 3.7% and maintains a conservative payout ratio, adding to its long-term appeal.
In summary, its unparalleled dividend history, prudent payout strategy, and reliable earnings trajectory make it an attractive choice for income-focused investors.
Dividend Update
Alongside its earnings release, the bank declared a fourth-quarter 2025 dividend of $1.63 per common share. This remains unchanged from the previous quarter but reflects a $0.08, or 5%, increase year-over-year. On an annualized basis, this equates to a dividend of $6.52 per common share.
Stock Recommendation
Given the solid financial performance, steady dividend growth, and ongoing operational improvements, we assign a “Buy” rating to the stock at its current price of CAD 175.78 per share as of September 12, 2025.
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