Bank of Montreal
Bank of Montreal Fundamental Analysis
Bank of Montreal (BMO.TO) shows moderate financial fundamentals with a PE ratio of 14.86, profit margin of 11.77%, and ROE of 10.47%. The company generates $76.8B in annual revenue with weak year-over-year growth of -0.52%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 25.6/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze BMO.TO's fundamental strength across five key dimensions:
Efficiency Score
WeakBMO.TO struggles to generate sufficient returns from assets.
Valuation Score
ModerateBMO.TO shows balanced valuation metrics.
Growth Score
ModerateBMO.TO shows steady but slowing expansion.
Financial Health Score
WeakBMO.TO carries high financial risk with limited liquidity.
Profitability Score
WeakBMO.TO struggles to sustain strong margins.
Key Financial Metrics
Is BMO.TO Expensive or Cheap?
P/E Ratio
BMO.TO trades at 14.86 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, BMO.TO's PEG of 3.04 indicates potential overvaluation.
Price to Book
The market values Bank of Montreal at 1.57 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at -14.59 times EBITDA. This is generally considered low.
How Well Does BMO.TO Make Money?
Net Profit Margin
For every $100 in sales, Bank of Montreal keeps $11.77 as profit after all expenses.
Operating Margin
Core operations generate 15.57 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $10.47 in profit for every $100 of shareholder equity.
ROA
Bank of Montreal generates $0.62 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Bank of Montreal generates limited operating cash flow of $4.02B, signaling weaker underlying cash strength.
Free Cash Flow
Bank of Montreal generates weak or negative free cash flow of $2.30B, restricting financial flexibility.
FCF Per Share
Each share generates $3.25 in free cash annually.
FCF Yield
BMO.TO converts 1.71% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
14.86
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
3.04
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.57
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.74
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
4.75
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.39
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.10
vs 25 benchmark
ROA
Return on assets percentage
0.006
vs 25 benchmark
ROCE
Return on capital employed
0.03
vs 25 benchmark
How BMO.TO Stacks Against Its Sector Peers
| Metric | BMO.TO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 14.86 | 18.56 | Better (Cheaper) |
| ROE | 10.47% | 828.00% | Weak |
| Net Margin | 11.77% | -175.00% (disorted) | Strong |
| Debt/Equity | 4.75 | 1.00 | Weak (High Leverage) |
| Current Ratio | 0.39 | 663.54 | Weak Liquidity |
| ROA | 0.62% | -21308.00% (disorted) | Weak |
BMO.TO outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Bank of Montreal's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
212.30%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
51.81%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
-82.10%
Industry Style: Value, Dividend, Cyclical
Declining