This Top Bank Stock Just Hiked Its Dividend for the Second Time This Year

Bank stocks can be excellent sources of recurring income for dividend investors. Investing in them is a great way to bet on the strength of the overall economy. And in Canada, investing in one of top five chartered banks is one of the safest options for long-term investors.

Bank of Montreal (TSX:BMO)(NYSE:BMO) is one of the big five, and it recently released solid earnings numbers and announced an increase to its dividend. On May 29, the bank announced that its adjusted net income was $2 billion for the second quarter, down 7% year over year. It’s not a bad performance given that the economy has faced adversity due to rising costs over the past few years.

The results were strong enough for BMO to justify increasing its dividend. The bank declared a quarterly dividend of $1.55, which represents a 5% increase from the $1.47 in quarterly dividends it was paying a year ago. Earlier this year, BMO also bumped up its dividend to $1.51, making this recent increase its second dividend hike of the year.

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The new dividend means investors will collect $6.20 per share over the course of a year. And that pushes its yield up to around 5.2%. If you want to collect $1,000 in dividends from the stock, you would need to invest a little over $19,000 into shares of BMO given its current dividend rate.

Year to date, the stock is down around 8% but for long-term investors, BMO can still make for a solid investment to buy and hold.