Topic: How To Invest

Dividend Advisor Hotline – Friday, May 28, 2021

Article Excerpt

BANK OF MONTREAL, $126.83, Toronto symbol BMO, remains a buy. With the February 2020 payment, Bank of Montreal increased its quarterly dividend by 2.9%. Investors now receive $1.06 a share instead of $1.03. The new annual rate of $4.24 yields a solid 3.3%. Due to the COVID-19 pandemic, Canada’s banking regulator ordered lenders to freeze their dividends and suspend share buybacks. However, it’s likely the regulator will let banks resume dividend increases later this year. Meantime, the rollout of COVID-19 vaccines is letting Bank of Montreal take back some of the funds it had previously set aside to cover potential loan defaults. In its fiscal 2021 second quarter, ended April 30, 2021, loan-loss provisions dropped 94.6%, to $60 million from $1.12 billion a year earlier. That’s also a big improvement over its first quarter provisions of $156 million. Thanks to those lower provisions, Bank of Montreal’s earnings in the quarter soared 201.0%, to $3.13 a share (or a total of $2.10 billion) from $1.04 a..