BANK OF MONTREAL $99 (Toronto symbol BMO; Income-Growth Dividend Payer Portfolio, Finance sector; Shares outstanding: 647.7 million; Market cap: $64.1 billion; Dividend yield: 3.6%; Dividend Sustainability Rating: Highest; www.bmo.com) began operating in 1817, making it Canada’s oldest chartered bank. Right now, it’s the fourth-largest of the big five banks, with assets of $708.6 billion (as of July 31, 2017).

Bank of Montreal currently provides a wide range of financial services to over 10 million customers from 900 branches in Canada and 600 in the U.S. Its Canadian retail banking operations supply 40% of its earnings, while the U.S. branches contribute 18%.

The bank gets a further 23% of earnings from its capital markets division, which sells brokerage and securities-trading services. The remaining 19% comes from its wealth management business.

188 years of dependable dividends

Bank of Montreal has paid dividends without interruption for 188 years. It last raised its quarterly dividend by 2.3% with the August 2017 payment. Investors now receive $0.90 a share instead of $0.88. The new annual rate of $3.60 yields 3.6%.

The bank aims to pay out between 40% and 50% of its earnings as dividends. In the most recent quarter, the payout ratio was 43.8%.

Low interest rates continue to spur demand for mortgages and other loans. As a result, Bank of Montreal’s revenue rose 23.3%, from $17.1 billion in 2012 to $21.1 billion in 2016 (fiscal years end October 31).

Its overall earnings also gained 23.7%, from $4.1 billion in 2012 to $5.0 billion. Due to fewer shares outstanding, earnings per share rose 26.4%, from $5.95 to $7.52.

Bank of Montreal continues to fuel its growth with timely acquisitions. In December 2015, it paid $8.9 billion U.S. for the transportation finance operations of General Electric Co. (New York symbol GE). That business lends money to commercial truck and trailer manufacturers, and dealers and buyers in the U.S. and Canada.

If you exclude the costs to integrate the new operations, Bank of Montreal earned $1.4 billion in the quarter ended July 31, 2017. That’s a gain of 6.1% from $1.3 billion a year earlier. Due to more shares outstanding, earnings per share gained 4.6%, to $2.03 from $1.94. Revenue improved 5.3%, to $5.2 billion from $4.9 billion.

Thanks to the strong economy, more of Bank of Montreal’s clients are paying back their loans on time. In the latest quarter, it set aside $134 million to cover potential bad loans, down 47.9% from $257 million a year earlier.

These investments will pay off

The bank continues to expand its online and mobile banking operations. At the same time, it is closing some of its brick-and-mortar branches. As a result of these expenses, its efficiency ratio (non-interest costs divided by revenue—the lower, the better) worsened to 59.0% in the latest quarter from 53.7% a year earlier. However, those investments should cut its future operating costs.

Bank of Montreal’s forecast earnings will probably rise from $8.01 a share in fiscal 2017 to $8.27 in 2018. The stock trades at just 12.0 times the 2018 estimate.

Bank of Montreal is a buy.