I do not own this stock of Canadian Imperial Bank of Commerce (TSX-CM, NYSE-CM). This was the only major Canadian Bank I was not following. I think it is about time I did. The only reason I would not buy this bank is because I already hold 3 Canadian Banks.
The dividend yields are good and the dividend growth is low. The Current dividend is 4.38% with a 5 year median of 4.67% and an historical median of 4.25%. The Dividends have grown at 6.2% and 5.6% per year over the past 5 and 10 years. The last dividend increase was in this financial year and it was for 2.5%. This bank often increases the dividends more than once a year. In the last financial year it raised the dividends 3 times and the total increase for the financial year was 11.24%.
The Dividend Payout Ratio for CIBC for the last financial year for EPS was 44.4%. (The bank's financial year end October 31 each year.) The 5 year DPR for EPS was 46.9%. Both these are within the 40% to 50% range for Canadian Banks. No one seems to care about cash flows on banks so I will not do DPR for CFPS for this stock.
The Debt Ratio is a bit low at 1.05 for this bank. Yes, I know that this ratio used to be acceptable at 1.04. However, since 2008 this ratio has moved up and other banks are moving higher except for the National Bank. The next lowest is the Royal Bank with the others at 1.07. See chart below.
|Bank of Montreal||TSX||BMO||NYSE||BMO||1.07|
|Bank of Nova Scotia||TSX||BNS||NYSE||BNS||1.07|
|National Bank of Canada||TSX||NA||OTC||NTIOF||1.05|
|Toronto Dominion Bank||TSX||TD||NYSE||TD||1.07|
Revenue has been low to moderate in growth. For example, the Revenue per Share is up by 4.4% and 1.2% per year over the past 5 and 10 years. Growth in earnings is better with the 5 and 10 years growth at 7.9% and 3.7% per year. However, the 5 year running average growth over the past 5 and 10 years is better at 17.8% and 8.6% per year. This implies that the last 5 and 10 years were better than the previous 5 and 10 years for earnings.
Total growth has been moderate to good. The total growth over the past 5 and 10 years is at 12.93% and 4.68% per year. The portion of this total return attributable to dividends is at 4.71% and 3.59% per year. The portion of this total return attributable to capital gain is at 8.23% and 1.09% per year.
The 5 year low, median and high median Price/Earnings per Share Ratios are 9.00, 9.89 and 10.78. The 10 year ratios are 9.36, 10.50 and 11.64. The historical ratios are 8.72, 9.76 and 11.59. The current P/E Ratio is 10.99 based on a stock price of $113.16 and 2017 EPS estimate of $10.30. This stock price testing suggests that the stock price is reasonable but above the median.
I get a Graham Price of $114.52. The 10 year low, median and high median Price/Graham Price Ratio is 0.88, 1.04 and 1.16. The current P/GP Ratio is 0.99 based on a stock price of $113.16. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10 year Price/Book Value per Share Ratio of 2.03. The current P/B Ratio is 2.00 based on BVPS of $56.59 and a stock price of $113.16. The current P/B ratio is 1.7% lower than the 10 year median. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The current dividend yield is 4.38% based on dividends of $4.96 and a stock price of $113.16. The historical median dividend yield is 4.25%. The current dividend yield is 3% higher than the historical median. This stock price testing suggests that the stock price is relatively reasonable and below the median.
When I look at analysts' recommendations I find Strong Buy, Buy, Hold and Underperform Recommendations as I have on all the banks. Most of the recommendations are either a Hold or an Underperform. The consensus would be a Hold. The 12 month stock price consensus is $113.81. This implies a total return of 4.96% with 0.57% from capital gain and 4.38% from dividends.
Karl Utermohlen of Motley Fool likes this stock. He talks about their announcement that they will hire 500 workers with disabilities in 2017. He also talks about their remittances program. Staff at Equity Focus talk about the good dividend of this bank and that volatility cannot be evaded, but it can be diminished with dividends. See what analysts are saying at Stock Chase.
The last stock I wrote about was about was Enghouse Systems Ltd. (TSX-ESL, OTC-EGHSF)... learn more . The next stock I will write about will The next stock I will write about will be Valener Inc. (TSX-VNR, OTC-VNRCF)... learn more on Wednesday, February 01, 2017 around 5 pm. Tomorrow on my other blog I will write about Banks and Ratios... learn more on Tuesday, January 31, 2017 around 5 pm.
Canadian Imperial Bank of Commerce (CIBC) is a global financial institution. The Company provides a range of financial products and services to individual, small business, commercial, corporate and institutional clients in Canada and around the world. Its web site is here Canadian Imperial Bank of Commerce.
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