ANZ (ANZBY) & Bank of Montreal (BMO) Critical Comparison

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ANZ (NYSE: BMO) and Bank of Montreal (NYSE:BMO) are both large-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, risk, institutional ownership, earnings, profitability, valuation and analyst recommendations.

Dividends

ANZ pays an annual dividend of $1.15 per share and has a dividend yield of 5.6%. Bank of Montreal pays an annual dividend of $2.95 per share and has a dividend yield of 3.6%. ANZ pays out 66.1% of its earnings in the form of a dividend. Bank of Montreal pays out 47.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Profitability

This table compares ANZ and Bank of Montreal’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ANZ N/A N/A N/A
Bank of Montreal 16.17% 14.75% 0.79%

Valuation & Earnings

This table compares ANZ and Bank of Montreal’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ANZ $26.30 billion 2.29 $4.88 billion $1.74 11.82
Bank of Montreal $21.48 billion 2.44 $4.09 billion $6.24 13.11

ANZ has higher revenue and earnings than Bank of Montreal. ANZ is trading at a lower price-to-earnings ratio than Bank of Montreal, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and price targets for ANZ and Bank of Montreal, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ANZ 0 0 0 0 N/A
Bank of Montreal 0 0 5 0 3.00

Bank of Montreal has a consensus price target of $104.50, suggesting a potential upside of 27.72%. Given Bank of Montreal’s higher possible upside, analysts clearly believe Bank of Montreal is more favorable than ANZ.

Institutional & Insider Ownership

0.1% of ANZ shares are owned by institutional investors. Comparatively, 43.1% of Bank of Montreal shares are owned by institutional investors. 0.3% of ANZ shares are owned by insiders. Comparatively, 1.0% of Bank of Montreal shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

ANZ has a beta of 1.36, meaning that its stock price is 36% more volatile than the S&P 500. Comparatively, Bank of Montreal has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500.

Summary

Bank of Montreal beats ANZ on 11 of the 15 factors compared between the two stocks.

ANZ Company Profile

Australia and New Zealand Banking Group Limited, together with its subsidiaries, provides various banking and financial products and services to individual and business customers. The company's Australia division offers retail products and services to consumer and private banking customers in Australia through the branch network, mortgage specialists, the contact center, and various self-service channels, such as Internet banking, phone banking, ATMs, Website, and digital banking; and corporate and commercial banking services comprising financial solutions through dedicated managers focusing on privately owned small, medium, and large enterprises, as well as the agricultural business segment. Its Institutional division provides working capital and liquidity solutions, including documentary trade, supply chain financing, cash management solutions, deposits, payments, and clearing; loan products, loan syndication, specialized loan structuring and execution, project and export finance, debt structuring and acquisition finance, structured trade and asset finance, and corporate advisory services; and risk management services on foreign exchange, interest rates, credit, commodities, debt capital markets, and wealth solutions. The company's New Zealand division offers retail and commercial banking and wealth management services to consumer, private banking, and small business customers. Its Wealth Australia division provides life, general, and mortgage insurance; and fund management services. The company's Asia Retail & Pacific division offers general banking and wealth management services; and products and services to retail customers, small to medium-sized enterprises, institutional customers, and governments. It operates in Australia, New Zealand, the Asia Pacific, Europe, and the Americas. The company was founded in 1835 and is headquartered in Melbourne, Australia.

Bank of Montreal Company Profile

Bank of Montreal provides diversified financial services primarily in North America. It operates through three groups: Personal and Commercial Banking, Wealth Management, and BMO Capital Markets. The company's personal banking products and services include checking and savings accounts, credit cards, mortgages, creditor insurance products, and financial and investment advice services; and commercial banking products and services comprise business deposit accounts, commercial credit cards, business loans and commercial mortgages, cash management solutions, foreign exchange, and specialized banking programs for small business and commercial banking customers. It also offers equity and debt underwriting, corporate lending and project financing, mergers and acquisitions advisory services, securitization, treasury management, risk management, debt and equity research, and institutional sales and trading services to corporate, institutional, and government clients. In addition, the company offers trade finance, investment management, online investing, trust and estate services, tax planning, and investment solutions to institutional investors, as well as industry-leading research, sales, and trading services. It operates approximately 1,500 branches in Canada and the United States, as well as 2 smart branches in Edmonton and Calgary, Alberta. The company was founded in 1817 and is headquartered in Montreal, Canada.

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