Should You Buy Bank of Montreal Ahead of Earnings?

Bank of Montreal (TSX:BMO)(NYSE:BMO) is the fourth-largest of the Big Six Canadian bank stocks. Shares of BMO have dropped 8.1% in 2022 as of close on August 25. The stock is still up 1.4% from the previous year.

The bank is expected to release its third quarter fiscal 2022 earnings before markets open on August 30. Most of BMO’s peers have already released their third batch of 2022 results this week. Royal Bank, for example, saw profits shrink in the year-over-year period in the face of rising interest rates and a slowing economy. Canada’s financial sector may need to brace for more challenges in the months ahead.

Investors got to see BMO’s second quarter fiscal 2022 results on May 25. It reported adjusted net income of $4.77 billion in the first six months of 2022 – up 15% from the previous year. Adjusted earnings per share (EPS) also jumped 15% to $6.19.

BMO’s Canadian Personal and Commercial banking segment delivered adjusted net income of $941 million – up 21% compared to the second quarter of 2021. Meanwhile, the United States P&C banking segment posted adjusted net income growth of 8% to $589 million. BMO reported a drop in adjusted earnings in its Wealth Management and Capital Markets segments.

Shares of this bank stock currently possess a very favourable price-to-earnings ratio of 7.1. It offers a quarterly dividend of $1.39 per share. That represents a solid 4.2% yield.