Why Bank of Montreal Is Worth Banking On

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Canadian financial services giant Bank of Montreal (NYSE: BMO  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at BMO and see what CAPS investors are saying about the stock right now.

BMO facts

Headquarters (founded)

Toronto (1817)

Market Cap

$37.6 billion

Industry

Diversified banks

Trailing-12-Month Revenue

$15.6 billion

Management

CEO William Downe
CFO Thomas Flynn

Return on Equity (average, past 3 years)

14.2%

Dividend Yield

5%

Competitors

Canadian Imperial Bank of Commerce
Royal Bank of Canada
Toronto-Dominion Bank

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 91% of the 389 members who have rated BMO believe the stock will outperform the S&P 500 going forward.   

Just last week, one of those Fools, OwnershipSociety, succinctly summed up the BMO bull case for our community:

[T]hey are focused on the commercial space, which I think makes their asset profile compare favorably to many US banks. They have relatively low mortgage exposure compared to their commercial loans, which should help them outperform other Canadian banks as housing prices there decelerate. I do not believe that the housing market will crash in Canada.

Among other things, they trade at the deepest discount to Graham Number out of any large cap money center bank.

They had some [net interest margin] and efficiency ratio issues in Q2 but I think these issues should only improve as rates rise in the US and they make their high yield savings accounts less attractive relative to checking.

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, BMO may not be your top choice.

Many investors are scared about investing in big banking stocks after the crash, but the sector has one notable stand-out. In a sea of mismanaged and dangerous peers, it rises above as "The Only Big Bank Built to Last." You can uncover the top pick that Warren Buffett loves in The Motley Fool's new report. It's free, so click here to access it now.


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