On February 24,2021 we wrote about BMO being our pick for the stock of the day. The stock was trading between the $95-$100 range. Today we look at how it has performed since this date.
Performance – Technical Perspective
The BMO stock went up from the $100 mark and sits at the time of writing this post, at $127.52 on the TSX. This easily equates to a 27% increase in less than 6 months.
When you analyze the chart you can see a very clear breakout of the original cup and handle we wrote about originally. Ever since the breakout, BMO has run up consistently until the last 4 weeks where it has begun to stabilize. These past few weeks will set up for potential higher gains if it fully forms a flat base or saucer pattern in the weeks to come.
From a chart perspective, it seems BMO investors have taken to a cooling off period. So far, the technical analysis is strong and suggests the stock is finding a new home in the $127 area.
Performance – Fundamental Perspective
BMO is still in a strong position fundamentally. Their earnings are amongst the highest of the Canadian banks, and their cash flow is the best of their peers. BMO heas a strong operating and profit margin of 30.52% and 23.40% respectively.
The company still boasts a good dividend at $4.24 annually, currently a 3.34% yield. This is lower than the 4% we quoted back in February 2021, due to the recent rise in the stock price.
While all this is true, we have the opinion that there is a better pick as of right now. The best Canadian bank from a fundamental perspective is TD Canada Trust (TD Bank). Stock Ticker TD listed on the TSX.
We’ll be releasing a new post this week to compare BMO, TD, and the other leaders of Canadian Banks to assess which is in the best position from a value perspective.