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Bank of Montreal Message Board

  • randywhatson randywhatson Nov 15, 2007 3:22 PM Flag

    dividneds

    My name is Greg Brumelli and I am a texas retiree. I am thinking of investing is some of the big 5 banks because I have heard that they pay out substantial dividends. Does anyone have any experience with these banks? Have you gotten any dividends from the big 5 banks?

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    • I have collected dividends for years from BMO....At this time I would not be investing in any financial firms until the smoke clears from CDO and other derivative problem

      You might want to consider the Canadian Royalty Trusts...They pay 10-15% dividends and are valued by the oil and gas they own as well as their production.

    • BMO is a steady dividend payer (130 consecutive years, I think), but has staggered a bit in top-line earnings growth compared to peers in the last 5 years. I like BMO's emphasis on high-wealth clientele and on investment banking (over the long term). It's a laggered in the retail banking business (its U.S. subsidiary is a perrennial drag on ROE), but I'm not interested in owning retailers per se. I'm looking to pad my position at $56 Cdn. If you are looking for a strong retail-banking play, I'd check out Bank of America (with an eye-popping yield near 6%).
      If I was shopping with US dollars I'd be a bit cautious about Cdn-denominated equities just now. I don't expect U.S. currency weakness to be fully worked out for a least another couple of years, but I'm not convinced that Canadian dollars are long-term justified at these levels given the likelihood of cyclical corrections in oils/minerals, looming trade protectionism from the U.S. and a persistent productivity gap. I'd first be looking to Asian banks like ICICI if currency hedging is your game (I've been buying up Asian ADRs as my principal means to hedge against a fall in Cdn currency ... without getting mired in too much U.S. dollar exposure).
      The CDO, SIV, Sub-prime mess is creating a lot of opportunities in financials, but I'd only invest if I wasn't depending on the income stream right away -- it may take a year or two for banks to dig their way out again. Do your DD and maybe consult an adviser on portfolio allocation ... good luck.

 
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72.09+0.75(+1.05%)Oct 21 4:02 PMEDT

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