Banks have always been one of the cornerstones for Dividend Based Investing, because they are dividend paying behemoths. They all like to increase their dividend payments regularly and they generally have some of the best yields to go along with these regular increases. Obviously, the banks have been hit pretty hard recently, and although I still don't believe this crisis is over, I thought I'd start doing some analysis on the banks, to see how they stack up in my fairly unforgiving dividend analysis. So, first of is a bank I have always favoured as a dividend pick.

About the company:

Here is Bank of Montreal's description of what they do, which can be found on their website here

What the professionals think:

Score: 1.25/1.5

Dividend performance:

Dividend Information acquired at DividendInvenstors.ca

Score: 3.0/4.0

Fundamentals:

All fundamentals based on Trailing 12 Month (TTM) financial statements, and the latest market close share price of $41.45

Score: 1.5/3.5

Technicals:

Chart Acquired at StockCharts.com

Score: 0/1.0

Total Score: 5.75/10

Summary:

I have to say that this result really wasn't unexpected, and I'd imagine that once the 4th quarter results come out an even worse picture will be painted. This is probably true for all of the big banks here, but we'll take a look at them in the weeks to come. There are two things that stand out here that I'd like to point out, BMO's current dividend yield of 6.80% is something to get excited about, also the Graham number showing a $52.02 while the current share price is at $41.45. Both of these are reason enough for me to want to give this stock a BUY rating, but because of the low score, due to the technicals and current fundamentals, I have to give it a Don't Buy. Right now, I think the real decision is if you feel it is a good time to start entering into the banks, sure, the situation probably isn't over yet, but I think entering now may not be a bad decision either. Sure hte price may go lower, or it may stick aroundt he same level. I am not sure, and I don't think anyone could give you a yes or no answer on that, but being a big bank it will 'most likely' still be around for a long time to come, so jumping in and taking advantage of the 6.80% dividend yield may be something to consider. There are still a few more banks left to view, so lets see how they all stack up, and then figure out which one is the safest place to put our money.


edit: For more information on BMO I recommend reading Stockaholic's more recent article Bank of Montreal - Is the Dividend Safe?

Full Disclosure: I currently do NOT own shares in Bank of Montreal (TSE: BMO)

Disclaimer: Any information contained in the above article represents my opinions only, and should not be construed as personalized investment advice. I cannot assess, verify or guarantee the suitability of any particular investment to any particular situation and the reader of the article bears complete responsibility for its own investment research and should seek the advice of a qualified investment professional that provides individualized advice prior to making any investment decisions. All opinions expressed and information and data provided therein are subject to change without notice.