When the Bank of Montreal got down into the $118 range late last week, I saw a buying opportunity. But, I didn't buy. I held out in the hope that I could buy at a price low enough to give a yield of at least five percent.
Monday the price of Bank of Montreal stock wobbled about but, in the end, it was a down day and I bought in at $117.60. My yield was five percent right on the nose.
The Bank of Montreal is one of the Canada's largest banks. It has been paying dividends for going on two hundred years. It has gone almost two complete centuries without cutting its dividend. Buying Bank of Montreal stock for its dividend seems a very safe purchase. The dividend is almost guaranteed. Sadly, the stock price is not.
I only bought a hundred shares as I already had a nice amount of BMO shares in my portfolio. My income jumped $588 annually but I have also lost about $177 on paper thanks to the loss in value of the stock and the loss may well grow. The amount of the drop was not unexpected but the speed was.
I would not be surprised to see Bank of Montreal drop even more. It may even set a new low for the past year. If it does, I am buying another one hundred shares. Until then, I am going to sit quietly, watch from the sidelines and lick my stock-purchase wounds. The five percent yield will help me recover.
