Can You Get Rich by Investing in Bank of Montreal (TSX:BMO)?

Bank of Montreal’s (TSX:BMO)(NYSE:BMO) favourable business mix and growth play make it the ideal stock investment for people aspiring to be rich.

| More on:
hand using ATM

Image source: Getty Images

If you’re in the market for an investment that can get you rich, choose one of Canada’s illustrious banks. Bank of Montreal (TSX:BMO)(NYSE:BMO) is a favourite blue-chip stock of income seekers and wealth builders.

Some investors dodge the stock because the bank’s primary focus is on the Canadian market. Now that BMO’s international business is vastly improving, interest is suddenly growing. This stock could be your springboard to richness.

A solid foundation for growth

BMO’s $52.9 billion market capitalization places it as Canada’s fourth-largest bank. But even so, it ranks third as the best-performing bank at the halfway mark of this year. This coming August 27, BMO will present its fiscal quarter ending July 2019. Market analysts are expecting the bank to continue with its winning streak.

The bank’s key financial metrics over the last 12 months says it all. BMO’s growth is accelerating as a result of the diversification of the bank’s operating groups.

In 2018, adjusted net income grew by 9% to $6 billion compared with the previous year. Total net revenue rose by 5%, which resulted in a 14.6% adjusted return on equity. BMO’s capital year-end position provided the flexibility to make better decisions around business growth this year.

BMO’s portfolio of businesses is its vital strength. The business mix enables the bank to deliver consistent and sustainable growth regardless of market conditions. You can see BMO has erected a solid foundation for growth.

Focus on expansion and technology

BMO is no longer the laggard in commercial banking in the U.S. and North America. The 10-fold growth in U.S. earnings since 2010 reflects BMO’s cross border capabilities. In 2018, there was a 25% increase in the U.S. business segment.

Management is aiming higher, hoping to capture the leading position in the region. But apart from the expansion into new markets, BMO is already scaling its technology investment. The bank is leveraging its transformative technology architecture, data, and digital capabilities to deliver business value and the ultimate customer experience.

Dividend history

Believe it or not, the banking giant is also Canada’s first dividend payer. That is why BMO ranks as among the most considerable income investments you can find on the TSX. Whether you’re securing your financial future or filling up your retirement war chest, BMO can help you achieve your investment goals.

You can ask a devoted investor who invested $10,000 in BMO two decades ago. The stock delivered a total return of 678.55%, or an average annual total return of 10.8%. As a prospective investor, your return could be higher in 20 years given the dividend yield of 4.38% and the opportunity to reinvest dividends

Push the boundaries to richness

BMO is pushing the boundaries to become a force for positive change. The bank’s platform of diversified businesses and digital innovation has elicited excitement in customers.

But the bank’s impressive accomplishments and robust earnings growth have a profound impact on the lives of investors. You have the opportunity to achieve your purpose, ambition, and realize top-tier shareholder return. You could be genuinely rich 20 or fewer years from now.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Christopher Liew has no position in any of the stocks mentioned.

More on Dividend Stocks

Canadian Dollars
Dividend Stocks

1 Dividend Stock That Could Create $683.87 in Tax-Free Passive Income in 10 Years

You can earn massive passive income tax free from your TFSA. Here's how with your first dividend stock or GIC!

Read more »

Dividend Stocks

This 4.26% Dividend Stock Is My Top Pick for Immediate Income

Finding a great dividend stock is one thing, but growth in the near future is all but certain for this…

Read more »

edit Safe pig, protect money
Dividend Stocks

3 Dividend Stocks You Can Safely Hold for Decades

Are you looking for dividend stocks that can perform for the long term? These three stocks could earn safe and…

Read more »

sale discount best price
Dividend Stocks

3 Bargain Stocks You Can Buy Today and Hold Forever

Are you looking for some of the best bargain stocks you can buy today? Here’s a trio of options that…

Read more »

Senior couple at the lake having a picnic
Dividend Stocks

Have Room in Your TFSA? Start Earning Tax-Free Dividends With Just $15,000

Use the tax-sheltered status of the TFSA to hold quality dividend stocks such as Enbridge and create a stable income…

Read more »

stock analysis
Dividend Stocks

Better Buy for TFSA Passive Income: Telus Stock or TD Bank?

TD and Telus look cheap today. Is one stock now oversold?

Read more »

growing plant shoots on stacked coins
Dividend Stocks

Want Extra Monthly Cash? 1 Dividend Stock to Buy Now and Hold Forever

Simply buying and holding this top monthly dividend stock for the long term can potentially make you super rich.

Read more »

Financial technology concept.
Dividend Stocks

2 Dirt-Cheap Stocks to Build the Core of Your TFSA

Sun Life Financial (TSX:SLF) and another dirt-cheap TSX stock to buy this September as the TSX Index fades a bit.

Read more »