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Relating to Canadian banks, stability and earnings typically go hand in hand. However even among the many Large Six, some names stand out for his or her consistency, particularly in relation to dividends. One financial institution, particularly, has earned a repute for doing simply that, yr after yr: Financial institution of Montreal (TSX:BMO).
So, how lengthy has BMO been rewarding shareholders with dividend hikes? Attempt 24 straight years. That’s spectacular in any market, however it’s much more notable contemplating the financial shocks of the previous decade, from oil crashes and housing worries to the COVID-19 pandemic and the more moderen wave of rate of interest hikes. By all of it, BMO has saved paying buyers extra annually.
Let’s take a better have a look at whether or not this streak is prone to proceed and if BMO is value shopping for in the present day.
Previous is new once more
First, some fast context. BMO is the oldest financial institution in Canada, based in 1817. However it’s removed from old school. The dividend inventory has aggressively expanded its presence within the U.S., particularly after its acquisition of Financial institution of the West in 2023. That $16.3 billion deal considerably elevated BMO’s U.S. footprint, significantly in California and different high-growth markets. Whereas it weighed on short-term earningsit positioned BMO as a extra diversified North American banking big.
In its second quarter of 2025, BMO reported adjusted internet earnings of $2.05 billion, in comparison with $2.03 billion the yr earlier than. That was a stable beat in opposition to estimates, helped by bettering mortgage progress and a better-than-expected efficiency from its U.S. private and industrial banking section. Income got here in at $8.78 billion, up from $7.97 billion the yr earlier than. These should not blockbuster numbers, however they level to regular progress after a couple of quarters of digestion post-acquisition.
And right here’s the important thing half: BMO additionally raised its quarterly dividend once more by 5%, to $1.63 per share. On an annualized foundation, that works out to $6.52 and offers the inventory a yield of round 4.2% primarily based on latest costs. In in the present day’s market, a yield that prime from a serious Canadian financial institution, with a clear steadiness sheet and lengthy dividend historical past, isn’t straightforward to seek out.
Concerns
Now, there are dangers. BMO, like all lenders, faces stress from a softer housing market, larger credit score provisions, and the potential of a slowing financial system. In Q2, it put aside $1.1 billion for credit score losses, a serious bounce from $705 million. Its capital markets division additionally confirmed some weak spot, as funding banking exercise stays sluggish.
However these dangers are already mirrored within the share value. BMO inventory has since moved previous 2022 highs and nonetheless trades at 14.6 occasions earnings. That’s barely larger than its long-term common and within the mid-range of the Large Six. Traders in the present day aren’t simply getting a dependable dividend, they’re getting a reduction on a top-tier financial institution.
Plus, BMO’s diversification ought to assist soften the blow if Canadian shopper debt turns into extra of a problem. Its massive U.S. presence offers it publicity to a broader financial system, and its wealth administration and capital markets divisions add different income streams. This isn’t a one-trick pony. The long-term case is fairly easy: BMO has been round for over two centuries, it has survived each form of monetary shock, and it’s nonetheless handing shareholders extra earnings yearly. With 24 consecutive annual dividend hikes and a really sustainable payout ratio, there’s little motive to assume that may cease anytime quickly.
Backside line
In unsure markets, earnings issues greater than ever. And BMO delivers. Whether or not you’re a retiree in search of regular money circulation or a youthful investor aiming to reinvest these dividends for progress, BMO provides each security and upside.
So, in case you’re questioning the place to park your cash whereas markets stay rocky, BMO could be the reply. In any case, it’s not daily you discover a blue-chip Canadian financial institution buying and selling at a reduction with a 4%-plus yield and a 24-year historical past of doing precisely what dividend buyers love most: paying extra, yr after yr.
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