Yes, another bank DRIP stock. It doesn’t hurt to own more than one DRIP stock from same sector, as long as it provides you with stable dividend cash flow, discount in your dividend reinvestment, and be defensive in bear market.
In fact, Bank of Montreal offers one of the highest dividend yields among all Canadian major banks. In Dec. 2008, BMO starts to offer 2% discount on its dividend reinvestment, making its DRIP plan more appealing.
Don’t be scared at its currently high stock price (more than $60 now), even the stock price does not go any higher from here, you reap an annual return of 4.5% plus 2% discount on reinvestment. If the price goes down, it’s good time for you to load up more.
Remember, they haven’t cut their dividend ever since year 1829, making it the longest unbroken dividend record in Canadian history.
FYI – The last time a Canadian bank cut its dividend was in August 1992, when National Bank of Canada reduced its payout by half to 10 cents a share.
DRIP stock: Bank of Montreal
Symbol: BMO.TO
Current Stock price: $61.91
52-week Low: $33.78 (3/26/2009)
52-week High: $62.60 (3/26/2009)
Dividend per annual: $2.80
Dividend yield: 4.52%
Dividend Reinvest discount: 2%
Optional Cash Payment (OCP) available: Yes
Administrative agent: Computershare
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