TORONTO - Bank of Montreal (TSX: BMO) (NYSE: BMO) has raised its common share dividend by 3% to $1.55 for the third quarter of the fiscal year 2024, marking a 4 cent increase from the previous quarter and a 5% rise from the same period last year. The announcement was made by the bank's Board of Directors today.
In addition to the hike in common share dividends, the bank's Board also declared dividends on various series of Class B Preferred Shares, with payments ranging from $0.190875 to $0.426 per share.
Shareholders of record as of July 30, 2024, will be eligible for the dividend payout on August 27, 2024, for common shares and August 26, 2024, for preferred shares. These dividends have been designated as "eligible" dividends, meaning they qualify for preferential tax treatment under Canada's Income Tax Act and corresponding provincial and territorial legislation.
The Bank of Montreal also maintains a Shareholder Dividend Reinvestment and Share Purchase Plan ("the Plan"), which allows common shareholders to reinvest their cash dividends in additional common shares. These shares will be purchased on the open market without any discount until further notice.
Interested registered shareholders must submit their Enrollment Forms to Computershare Trust Company of Canada by August 1, 2024, to participate in the Plan. Non-registered or beneficial holders are advised to contact their financial institution or broker well ahead of this date for enrollment instructions.
This dividend increase is based on a press release statement from the Bank of Montreal.
InvestingPro Insights
The Bank of Montreal (BMO) has demonstrated a commitment to shareholder returns, as evidenced by its recent dividend increase. This move aligns with a historical pattern of dividend reliability, with the bank having maintained payments for an impressive 52 consecutive years.
The dividend yield as of the first half of 2024 stands at a substantial 4.59%, which is particularly attractive to income-focused investors. Moreover, the bank's stock has been trading near its 52-week high, reflecting a price of 95.97% of the peak, showcasing investor confidence in the institution's performance.
Analyzing the bank's financial health, the P/E ratio has been stable, with a slight increase from 18.08 to 18.42 in the last twelve months as of Q1 2024. This suggests that while the bank may not be undervalued, it's not excessively overpriced either, especially considering the bank's solid revenue growth of 44.31% in Q1 2024.
Still, one InvestingPro Tip indicates that BMO is quickly burning through cash, which could be a point of concern for potential investors. This highlights the importance of monitoring cash flow alongside other financial metrics.
For those considering an investment in BMO, there are additional InvestingPro Tips available that could provide further insights into the bank's performance and potential. Currently, there are 6 more tips listed on InvestingPro, which can be accessed at https://www.investing.com/pro/BMO. As an exclusive offer, readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking access to valuable investment analytics and comprehensive market data.
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