BMO bank stocks: are they worth the investment?

Updated: June 2, 2025

Bank of Montreal (BMO) ranks as among the biggest banks not just in the country but also in the US. In fact, Canada’s third-largest bank has more branches in the US – over 1,000 – than it has domestically – around 900. The banking giant also boasts strong capital markets and wealth management businesses, making it an attractive option for investors looking for companies primed for growth.

So, how are BMO bank stocks performing lately? Are the stocks worth the investment? How do analysts see the stock’s future movement? Wealth Professional crunches the numbers in this guide.

How are BMO bank stocks performing?

As of May 20, Bank of Montreal stock price closed at $144.11, reflecting strong recent performance:

• 2.52 percent rise over the past week from $140.56
• 11.19 percent increase from the previous month’s $129.61
• 16.85 percent six-month jump from $123.33
• 23.16 percent year-on-year spike from $117.01

In its May 16 report, National Bank Financial (NBF) updated its target price for BMO stock to $144 and gave it an “outperform” rating. This shows that NBF – National Bank’s financial services subsidiary – foresees the stock performing better than its competitors and the market as a whole.

Financial analytics platform Stock Target Advisor, meanwhile, provided a more balanced forecast, rating BMO stock as “neutral.” The fintech firm’s analysis saw “six positive signals and six negative signals.” The mixed signals indicate that while the stock is performing well, there are certain factors that could potentially limit its growth.

For investors, this stresses the importance of considering both positive and negative factors when assessing a stock's performance.

Here’s a side-by-side comparison of the share price of BMO bank stock and the stocks of Canada’s largest banks as of May 20, 2025:

If you’re new to investing, this guide on how to buy stocks can give you practical tips and strategies to help kickstart your investment journey.

BMO bank stocks key metrics

The share price is just one of the many indicators of how a stock is performing. To find out whether BMO stock is a good buy, there are several key performance metrics that we need to look at. We’ll go over some of them in this section.

The numbers we’ve compiled are up to date as of May 20, 2025. They are also intended for information purposes only and not for trading.

BMO stocks market capitalization: $104.76 billion

Apart from slight dips in 2020 and 2022, BMO’s market cap has been steadily increasing in the past few years, registering the highest growth in a decade in 2021. Strategic acquisitions, like the Bank of the West deal, have expanded the bank’s footprint in North America and have been among the key drivers of its growth.

BMO also has a strong presence globally, with operations in Europe, Asia, and South America. This raises the banking giant’s potential for revenue generation and growth.

For starters, market cap is defined as the total value of a company’s shares of stock. It gives investors a picture of a company’s size compared to its competitors and helps in portfolio diversification. Generally, companies with large market caps are seen as more stable but offer limited growth. Small-cap firms, on the other hand, have higher growth potential but are viewed as more risky investments.

Here’s a look at BMO’s market capitalization in the past five years:

BMO stocks price-to-earnings (P/E) ratio: 13.54

Just like that of other Big Six banks, BMO’s P/E ratio falls well below the market average of 20 to 25. This shows that BMO bank stocks are undervalued despite the banking giant performing well.

BMO’s P/E ratio of 13.54 is considered excellent. This means that investors are paying less for every dollar of the bank’s earnings.

BMO stocks price-to-book (P/B) ratio: 1.10

A company’s P/B ratio gives investors an idea of whether a stock is undervalued or overvalued based on its net asset value (NAV). NAV reflects the fair market price per share of a stock.  A P/B ratio of 1 suggests that the stock is trading at a premium, while a figure below 1 can mean that a stock is undervalued.

BMO’s P/B ratio of 1.10 shows that its stock is trading above its book value. This can be a sign of potential growth. This figure is slightly above its five-year average of 1.04. This means that BMO bank stocks are a little bit costlier than they have been on average in the past half decade.

BMO stocks basic earnings per share (EPS): $10.36

BMO’s latest financial data shows that its basic EPS on May 20 is above its 2024 average of $9.52. The figure, however, is below its five-year average of $11.51 and its five-year high of $20.04, registered in 2022.

EPS gives investors a straightforward way to evaluate a company’s financial health and performance. This metric measures a firm’s profitability on a per-share basis. BMO stocks’ EPS is one of the highest among the Big Six, which shows that it’s performing better than most industry rivals.

BMO stocks dividend yield: 4.42%

BMO has registered a higher dividend yield compared to most of its Big Six cohorts. According to its website, it has been paying dividends since 1829. This makes it among the few companies listed in North American stock exchanges with an uninterrupted record of dividend payouts. For this reason, BMO bank stocks have become a popular option for dividend-seeking investors.

BMO stocks dividend payout ratio (DPR): 58.33%

BMO returns almost three-fifths of its earnings to shareholders in the form of dividends. Only Toronto-Dominion (TD) Bank and Bank of Nova Scotia (Scotiabank) have higher DPRs. This metric shows strong earnings for the Montreal-based banking giant. However, it also indicates that less earnings can be used for reinvestments that can potentially grow the bank’s business.

Find out where BMO stocks rank versus its industry peers in our list of the best-performing Canadian bank stocks.

How does BMO stock compare with other Big Six stocks?

To give you an idea of how Bank of Montreal stocks compare with those of other major Canadian banks, WP has gathered data from analytics platforms TradingView, TMX Money, and YCharts.

Here’s a side-by-side comparison of the stocks from the Big Six banks using the key metrics above. All figures are current as of May 20, 2025. As mentioned, these numbers are intended only to provide information and not to be used for trading.

Check out our detailed analysis of the other Big Six bank stocks:

• Royal Bank stocks
• TD Bank stocks
• Scotiabank stocks
• CIBC bank stocks
• National Bank stocks

If you need help in deciding which of these bank stocks fits your investment goals, it’s best to consult an experienced financial advisor. Our Best in Wealth Special Reports page is the place to go to find one.

Is BMO stock a good buy?

BMO is off to a strong start this year, registering almost $2.3 billion in adjusted net income, according to its first quarter financials. This represents a 21 percent year-on-year increase.

During the period, the banking heavyweight also saw revenue rise 18 percent, hitting $9.3 billion. Growth was fueled mostly by the solid performances from its wealth management and global markets segments.

While these figures are notable, they aren’t the only reasons why BMO bank stocks can be a great portfolio addition. Let’s go over the other factors that make BMO stock a good buy.

Robust earnings

In the quarter ending January 2025, BMO registered net income of $2.14 billion, a remarkable 66 percent rise from $1.29 billion in the same period last year. This amounts to EPS of $2.83, an almost 64 percent jump year-on-year.

As mentioned, the bank reported a 21 percent year-on-year rise on adjusted net income, which doesn’t include some one-time items. This translates to an adjusted EPS of $3.04, an almost 19 percent rise from its first quarter 2024 value.

These figures indicate BMO’s strong financial health and ability to reap profits, making BMO bank stocks a sound investment option.

Growing key businesses

BMO’s remarkable increase in revenue was driven by strong performances in its key businesses. In particular, the bank’s wealth management segment saw adjusted net income soar 53 percent fueled by higher net sales and solid global markets.

Its capital markets business, meanwhile, posted a 45 percent gain in adjusted earnings. The unit’s strong performance can be attributed to its robust global markets division. 

Return on equity

Another key indicator of BMO’s profitability is its return on equity (ROE). This shows investors how effectively the banking giant uses equity investments to earn profits.

BMO bank stocks registered an ROE of 10.6 percent in the first quarter, rising from 7.2 percent in the same period in 2024. On an adjusted basis, ROE stood at 11.3 percent, a slight year-on-year rise from 10.6 percent, but still reflects the bank’s improved profitability.

Dividend yield

At the current BMO stock share price, investors can get a 4.42 percent dividend yield, around 5 percent increase year-on-year. The banking giant also has a strong track record of dividend growth, which makes its stock an attractive long-term investment.

Bank of the West deal

The $13.5 billion acquisition of the California-based retail bank expanded BMO’s presence in the US significantly, which could be a good thing. The US dollar has been gaining on the Canadian dollar in the past few years, and this deal raises the value of BMO operations south of the border.

Additionally, BMO acquired the BNP Paribas subsidiary when the US dollar was weaker.  This allowed BMO to make foreign exchange (Forex) gains on the transaction. At the time of the purchase, Bank of the West averaged US$1 billion in annual earnings, which meant that BMO paid an amount that was similar to its own valuation. Overall, BMO got a fairly good deal from the acquisition.

How to buy BMO stocks

Self-directed investors can buy BMO stocks through the banking giant’s online trading platform InvestorLine. All you have to do is open an account, then you can start trading for a flat fee of $9.95. The platform doesn’t require a minimum amount if you want to sign up.

There are four types of accounts available:

Account holders can access a range of educational tools, performance trackers, and technical support. InvestorLine is also accessible via mobile app.

If this platform doesn’t suit you, you can also buy BMO bank stocks for third-party platforms or by opening an investment account with a brokerage firm.

But before starting your investment journey, it helps to build your knowledge about how stock investing works. One way of doing so is by keeping abreast of the latest industry developments.

Visit and bookmark our Investment News Page for easy access to breaking news, expert analysis, and the latest stock market trends.

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