There had been predictions floating around the internet that BMO might have to cut its quarterly dividend, as reported here. As someone who owns shares in Canadian banks, specifically Royal Bank of Canada (RY) and Toronto Dominion Bank (TD),I am always concerned about precedent setting dividend cuts. And I have been watching both BMO and Bank of Nova Scotia (BNS) as possible buys. But a dividend cut does not seem to be in the cards at BMO, at least not this quarter. On Tuesday, the bank posted third quarter results that easily exceeded analyst expectations, and which indicate a degree of ongoing stability:
- Net earnings: C$0.97 a share, versus C$0.98 Canadian cents a year earlier.
- Cash earnings: C$0.98, down from C$1.00 the year before, but above the average analyst estimate of C$0.95 a share.
- Quarterly dividend: maintained at C$0.70, the same as the last eight quarters
- Tier 1 Capital: 11.7%, up from 9.9% the year before.
Over the last year (above) shares have gone from $45 to $48, after hitting a low of $19.32 in March. The most recent dividend cut by a Canadian bank was in 1992, when National Bank of Canada cut its quarterly dividend from C$0.20 to C$0.10 a share. BMO has paid a dividend since 1829.
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