Then and now – Bank of Montreal
This post is a continuation of my series Then and Now where I revisit some older blogposts and either rip them to shreds (because my thinking has changed) or I’ll confirm my position on some personal finance topics or specific investments.
You can check out my previous posts in this series here:
This post is an update on my investing history to date with Bank of Montreal.
- I started writing about Bank of Montreal (BMO) in 2011 when I considered some Canadian dividend stock selections were somewhat easy.
- Many years ago, after noticing this big bank (along with others) make some serious money year-after-year, I decided to invest in this company.
- I believed bank stocks made a great home in registered accounts (like TFSAs, RRSPs) because you can reinvest dividends tax-free or tax-deferred.
- I also believed bank stocks are a wise, tax-efficient investment in taxable accounts because you can take advantage of the Canadian Dividend Tax Credit.
- I bought Bank of Montreal because it’s a core holding of most Canadian Exchange Traded Funds (ETFs) and big bank equity mutual funds.
- I bought BMO because I wanted to participate in the capital growth and dividend raises it has historically delivered shareholders – I believe similar growth could occur in the future. (Note: BMO has paid dividends 1829. Some stocks have paid dividends for generations).
- At the time of this post, BMO is now trading close to a 52-week high, at about $100 per share.
- Since I started investing in this stock, dividends have increased substantially. (Dividends are now $0.93 per share thanks to a recent increase.) Here is table showing dividend increases since just 2012.
Image courtesy of BMO here.
- Our dividend income earned from this company is almost enough to cover our hydro bill – every year.
- I have no plans to sell this stock. I may add more shares in the future.
My decision to buy (and hold) BMO has been a great decision but there are no guarantees when it comes to dividend income or investing in general. Not all of my purchases have come up roses. Purchasing individual stocks has risks and indexing could prove to provide better long-term returns. For diversification purposes, this is why I own more companies than just BMO let alone just financials in my portfolio. You can check out some of my holdings here.
What’s your take on Bank of Montreal as an investment? Own it in your portfolio as an individual stock?