Is Bank of Montreal the Right Stock to Retire With?http://www.fool.com/retirement/general/2012/01/12/is-bank-of-montreal-the-right-stock-to-retire-with.aspx Dan Caplinger
January 12, 2012
Now more than ever, a comfortable retirement depends on secure, stable investments. Unfortunately, the right stocks for retirement won't just fall into your lap. In this series, I look at 10 measures to show what makes a great retirement-oriented stock.
Retirees have gotten burned by banks over the past several years. But one place where the financial sector has done relatively well is Canada. With a more favorable housing environment that never saw the immense leverage that the U.S. suffered through in the housing bust, Bank of Montreal (NYSE: BMO ) and some of its peers held up far better than their southern neighbors from a financial standpoint -- even if their shares also fell hard. Now, will Bank of Montreal take advantage of its more favorable condition? Below, we'll look at how the company does on our 10-point scale.
The right stocks for retirees
Sure, you still want good returns, but you also need to manage your risk and protect yourself against bear markets, which can maul your finances at the worst possible time. The right stocks combine both of these elements in a single investment.
When scrutinizing a stock, retirees should look for:
With those factors in mind, let's take a closer look at Bank of Montreal.
Source: S&P Capital IQ. Total score = number of passes.
With six points, Bank of Montreal certainly gives conservative investors more of what they prefer from a stock than some of its American counterparts. The bank boasts a strong dividend that looks like what U.S. banks paid before the financial crisis, and the shares come at a reasonable valuation as well.
Interestingly, the next battleground for Bank of Montreal may be in the U.S. rather than Canada. Both it and competitor Toronto-Dominion (NYSE: TD