Head-To-Head Survey: City (NASDAQ:CHCO) versus Bank Of Montreal (NYSE:BMO)

Bank Of Montreal (NYSE:BMO) and City (NASDAQ:CHCO) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, dividends, analyst recommendations, earnings and profitability.

Volatility and Risk

Bank Of Montreal has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500. Comparatively, City has a beta of 0.49, suggesting that its stock price is 51% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Bank Of Montreal	11.72%	13.60%	0.71%
City	32.58%	16.34%	1.95%

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank Of Montreal	1	6	6	0	2.38
City	0	3	0	1	2.50

Bank Of Montreal currently has a consensus price target of $244.00, suggesting a potential upside of 44.28%. City has a consensus price target of $139.33, suggesting a potential downside of 1.88%. Given Bank Of Montreal’s higher possible upside, research analysts plainly believe Bank Of Montreal is more favorable than City.

Insider & Institutional Ownership

45.8% of Bank Of Montreal shares are owned by institutional investors. Comparatively, 72.4% of City shares are owned by institutional investors. 1.0% of Bank Of Montreal shares are owned by insiders. Comparatively, 1.8% of City 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.

Dividends

Bank Of Montreal pays an annual dividend of $4.81 per share and has a dividend yield of 2.8%. City pays an annual dividend of $4.00 per share and has a dividend yield of 2.8%. Bank Of Montreal pays out 54.3% of its earnings in the form of a dividend. City pays out 43.8% 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. Bank Of Montreal has increased its dividend for 4 consecutive years and City has increased its dividend for 6 consecutive years.

Valuation & Earnings

This table compares Bank Of Montreal and City”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank Of Montreal	$55.92 billion	2.10	$6.22 billion	$8.86	19.09
City	$398.98 million	5.00	$130.49 million	$9.14	15.54

Bank Of Montreal has higher revenue and earnings than City. City 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.

Summary

City beats Bank Of Montreal on 11 of the 18 factors compared between the two stocks.

About Bank Of Montreal

Bank of Montreal provides diversified financial services primarily in North America. It operates through Canadian P&C, U.S P&C, BMO Wealth Management, and BMO Capital Markets segments. The company’s personal banking products and services include deposits, mortgages, home lending, consumer credit, small business lending, credit cards, cash management, financial and investment advice, and other banking services; and commercial banking products and services comprise various of financing options and treasury and payment solutions, as well as risk management products. It also offers investing, banking, and wealth management advisory; digital investing services; financial solutions for individuals, families, and businesses; provides investment management services to institutional, retail, and high net worth investors; and diversified insurance, and wealth and pension de-risking solutions. In addition, the company provides individual life, critical illness and annuity products, as well as segregated funds, and group creditor and travel insurance to customers; debt and equity capital-raising, loan origination and syndication, balance sheet management, treasury management, mergers and acquisitions advice, restructurings and recapitalizations, trade finance, and risk mitigation services, as well as a range of banking and other operating services. Further, the company offers research and access to financial markets for institutional, corporate and retail clients through an integrated suite of sales and trading solutions related to debt, foreign exchange, interest rates, credit, equities, securitization, and commodities; provides new product development and origination services, as well as risk management and advisory services for hedging strategies, including in interest rates, foreign exchange rates and commodities prices; and funding and liquidity management services. The company was founded in 1817 and is headquartered in Montreal, Canada.

About City

City Holding Company operates as a holding company for City National Bank of West Virginia that provides various banking, trust, and investment management, and other financial solutions in the United States. The company offers checking, savings, and money market accounts, as well as certificates of deposit and individual retirement accounts. It also provides commercial and industrial loans that consist of loans to corporate and other legal entity borrowers primarily in small to mid-size industrial and commercial companies; commercial real estate loans comprising commercial mortgages, which are secured by nonresidential and multi-family residential properties; residential real estate loans to consumers for the purchase or refinance of residence; first-priority home equity loans; home equity lines of credit; amortized home equity loans; consumer loans that are secured and unsecured by automobiles, boats, recreational vehicles, certificates of deposit, and other personal property; and demand deposit account overdrafts, as well as owner-occupied real estate and construction, land development, and lines of credit. In addition, the company offers mortgage banking services, including fixed and adjustable-rate mortgages, construction financing, land loans, production of conventional and government-insured mortgages, secondary marketing, and mortgage servicing. Further, it provides deposit services for commercial customers comprising treasury management, lockbox, and other cash management services; merchant credit card services; wealth management, trust, investment, and custodial services for commercial and individual customers; and corporate trust and institutional custody, financial and estate planning, and retirement plan services, as well as automated-teller-machine, interactive-teller-machine, mobile banking, interactive voice response systems, and credit and debit card services. City Holding Company was founded in 1957 and is headquartered in Charleston, West Virginia.