Bank of Montreal (NYSE:BMO – Get Rating) and DNB Bank ASA (OTCMKTS:DNBBY – Get Rating) are both large-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, dividends, earnings, profitability, analyst recommendations, institutional ownership and valuation.
Profitability
This table compares Bank of Montreal and DNB Bank ASA’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Bank of Montreal | 33.03% | 17.05% | 0.92% |
| DNB Bank ASA | 39.63% | 10.10% | 0.82% |
Insider and Institutional Ownership
39.5% of Bank of Montreal shares are held by institutional investors. Comparatively, 0.1% of DNB Bank ASA shares are held by institutional investors. 1.0% of Bank of Montreal shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Dividends
Bank of Montreal pays an annual dividend of $4.25 per share and has a dividend yield of 4.6%. DNB Bank ASA pays an annual dividend of $1.62 per share and has a dividend yield of 9.1%. Bank of Montreal pays out 29.4% of its earnings in the form of a dividend. DNB Bank ASA pays out 89.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Bank of Montreal has raised its dividend for 1 consecutive years.
Risk & Volatility
Bank of Montreal has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500. Comparatively, DNB Bank ASA has a beta of 1.35, suggesting that its share price is 35% more volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for Bank of Montreal and DNB Bank ASA, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Bank of Montreal | 0 | 2 | 9 | 0 | 2.82 |
| DNB Bank ASA | 1 | 4 | 5 | 0 | 2.40 |
Bank of Montreal presently has a consensus target price of $157.58, indicating a potential upside of 71.19%. DNB Bank ASA has a consensus target price of $201.67, indicating a potential upside of 1,032.96%. Given DNB Bank ASA’s higher probable upside, analysts plainly believe DNB Bank ASA is more favorable than Bank of Montreal.
Earnings and Valuation
This table compares Bank of Montreal and DNB Bank ASA’s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Bank of Montreal | $26.06 billion | 2.38 | $6.17 billion | $14.47 | 6.36 |
| DNB Bank ASA | $7.12 billion | 3.87 | $2.95 billion | $1.82 | 9.78 |
Bank of Montreal has higher revenue and earnings than DNB Bank ASA. Bank of Montreal is trading at a lower price-to-earnings ratio than DNB Bank ASA, indicating that it is currently the more affordable of the two stocks.
Summary
Bank of Montreal beats DNB Bank ASA on 11 of the 17 factors compared between the two stocks.
About Bank of Montreal
Bank of Montreal provides diversified financial services primarily in North America. The company’s personal banking products and services include checking and savings accounts, credit cards, mortgages, 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, specialized banking programs, treasury and payment solutions, and risk management products for small business and commercial banking customers. It also offers investment and wealth advisory services; digital investing services; financial services and solutions; and investment management, and trust and custody services. In addition, the company provides life insurance, accident and sickness insurance, and annuity products; creditor and travel insurance to bank customers; and reinsurance solutions. Further, it offers client’s debt and equity capital-raising services, as well as loan origination and syndication, and treasury management; strategic advice on mergers and acquisitions, restructurings, and recapitalizations, as well as valuation and fairness opinions; and trade finance, risk mitigation, and other operating services. Additionally, the company provides research and access to markets for institutional, corporate, and retail clients; trading solutions that include debt, foreign exchange, interest rate, credit, equity, securitization and commodities; new product development and origination services, as well as risk management advice and services to hedge against fluctuations; and funding and liquidity management services to its clients. It operates through approximately 900 bank branches and 3,300 automated banking machines in Canada and the United States. Bank of Montreal was founded in 1817 and is headquartered in Montreal, Canada.
About DNB Bank ASA
DNB Bank ASA provides financial services for retail and corporate customers in Norway and internationally. The company offers personal banking products and services, including savings and investment products; loans, such as home mortgages, and car and consumer loans; pet, home and property, travel, and personal insurance products, as well as insurance products for vehicles; retirement savings products; foreign exchange and treasury activities; and Internet and mobile banking services, as well as cards. It also provides business banking products and services comprising savings and investment products consisting of savings accounts, fixed rate deposits, exchange traded products, bonds and commercial papers, asset management, and equity services; financing, such as installment loans, overdraft facility, bank guarantees, leasing, factoring, and trade and export financing services; transaction banking services; research, commodities, bonds and commercial papers, corporate finance, debt capital market, equities, foreign exchange and interest rates, and securities services; and Internet services, including online equity trading, online FX trading, e-confirmation, equities execution, and investor and margin accounts, as well as pension services. In addition, the company provides investment banking services, such as mergers and acquisition, and equity and debt capital market services; foreign exchange, interest rates, equities, commodities, fixed income, research, private equity, and securities services; and corporate banking services. Further, it offers private banking services. The company offers its products and services to various sectors, including energy; financial institutions; healthcare; manufacturing; packaging and forest products; seafood; shipping, offshore, and logistics; and telecom, media, and technology. DNB Bank ASA was founded in 1822 and is headquartered in Oslo, Norway.
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