On the subject of Canadian banks, stability and revenue usually go hand in hand. However even among the many Huge Six, some names stand out for his or her consistency, particularly in relation to dividends. One financial institution, specifically, has earned a status for doing simply that, yr after yr: Financial institution of Montreal (TSX:BMO).
So, how lengthy has BMO been rewarding shareholders with dividend hikes? Strive 24 straight years. That’s spectacular in any market, but it surely’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. Via all of it, BMO has saved paying traders extra every year.
Let’s take a better have a look at whether or not this streak is more likely to proceed and if BMO is price shopping for as we speak.
Outdated is new once more
First, some fast context. BMO is the oldest financial institution in Canada, based in 1817. But it surely’s removed from old style. 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, notably in California and different high-growth markets. Whereas it weighed on short-term earnings, it positioned BMO as a extra diversified North American banking large.
In its second quarter of 2025, BMO reported adjusted internet revenue 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 enhancing 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 aren’t blockbuster numbers, however they level to regular progress after just a few 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 provides the inventory a yield of round 4.2% primarily based on current costs. In as we speak’s market, a yield that top from a serious Canadian financial institution, with a clear steadiness sheet and lengthy dividend historical past, isn’t simple to seek out.
Concerns
Now, there are dangers. BMO, like all lenders, faces strain from a softer housing market, increased credit score provisions, and the potential for 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 increased than its long-term common and within the mid-range of the Huge Six. Traders as we speak 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 client debt turns into extra of a problem. Its giant 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 type of monetary shock, and it’s nonetheless handing shareholders extra revenue yearly. With 24 consecutive annual dividend hikes and a really sustainable payout ratio, there’s little cause to suppose that can cease anytime quickly.
Backside line
In unsure markets, revenue issues greater than ever. And BMO delivers. Whether or not you’re a retiree in search of regular money circulate or a youthful investor aiming to reinvest these dividends for progress, BMO presents each security and upside.
So, if you happen to’re questioning the place to park your cash whereas markets stay rocky, BMO may be the reply. In any case, it’s not each day 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 traders love most: paying extra, yr after yr.
