Head-To-Head Contrast: Mizuho Financial Group (NYSE:MFG) versus Bank Of Montreal (NYSE:BMO)

Mizuho Financial Group (NYSE:MFG) and Bank Of Montreal (NYSE:BMO) are both large-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, risk, analyst recommendations and valuation.

Dividends

Mizuho Financial Group pays an annual dividend of $0.15 per share and has a dividend yield of 1.7%. Bank Of Montreal pays an annual dividend of $4.80 per share and has a dividend yield of 3.0%. Mizuho Financial Group pays out 19.7% of its earnings in the form of a dividend. Bank Of Montreal pays out 55.7% 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. Bank Of Montreal is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Mizuho Financial Group has a beta of 0.46, meaning that its stock price is 54% less volatile than the S&P 500. Comparatively, Bank Of Montreal has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Mizuho Financial Group and Bank Of Montreal, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mizuho Financial Group	0	1	1	0	2.50
Bank Of Montreal	1	7	3	1	2.33

Bank Of Montreal has a consensus target price of $163.00, suggesting a potential upside of 3.22%. Given Bank Of Montreal’s higher probable upside, analysts clearly believe Bank Of Montreal is more favorable than Mizuho Financial Group.

Institutional and Insider Ownership

3.3% of Mizuho Financial Group shares are held by institutional investors. Comparatively, 45.8% of Bank Of Montreal shares are held by institutional investors. 0.0% of Mizuho Financial Group shares are held by company insiders. Comparatively, 1.0% of Bank Of Montreal shares are held by company 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.

Valuation and Earnings

This table compares Mizuho Financial Group and Bank Of Montreal”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mizuho Financial Group	$60.35 billion	1.85	$8.29 billion	$0.76	11.91
Bank Of Montreal	$55.92 billion	1.98	$6.22 billion	$8.61	18.34

Mizuho Financial Group has higher revenue and earnings than Bank Of Montreal. Mizuho Financial Group 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Mizuho Financial Group	16.35%	15.19%	0.45%
Bank Of Montreal	11.76%	12.16%	0.66%

Summary

Bank Of Montreal beats Mizuho Financial Group on 12 of the 18 factors compared between the two stocks.

About Mizuho Financial Group

Mizuho Financial Group, Inc., together with its subsidiaries, engages in banking, trust, securities, and other businesses related to financial services in Japan, the Americas, Europe, Asia/Oceania, and internationally. It operates through Retail & Business Banking Company, Corporate & Institutional Company, Global Corporate Company, Global Markets Company, Asset Management Company, and Others segments. The company provides deposit products; syndicated, housing, and card loans; business matching services; and advisory services related to overseas expansions, and mergers and acquisitions-related services. It also offers consulting services, including asset management and asset succession; payroll services; and sells lottery tickets issued by prefectures and ordinance-designated cities. In addition, it offers fund management, underwriting of equity and bonds, risk hedging products, etc. for corporate customers; solutions based on capital management, business strategy, and financial strategy; real estate services; advisory services and solutions, such as advice on proposals on various investment products to financial institutions; and financial services that include funding support and public bonds underwriting. Further, the company offers corporate finance and transaction banking srvices; sales and trading services; investment products; pension funds; and ALM and investment services, including stable capital raising and balance sheet management, as well as management of fixed income, equity, and other securities portfolios. Additionally, the company provides online banking, cash management solutions, currency transaction, trade finance, custody, yen correspondence settlement, and research and consulting services; trust, securitization and structured finance, and stock transfers; and private banking and information technology-related services. Mizuho Financial Group, Inc. was founded in 2000 and is headquartered in Tokyo, Japan.

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.