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The Canadian Imperial Bank of Commerce – Attractive Valuation and Dividend Yield

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This article on The Canadian Imperial Bank of Commerce (CM) is the fourth of a 5 part series on 'The Big 5' Schedule A Canadian banks.

I do not view CM as having the same pedigree as The Royal Bank of Canada (RY) and The Toronto-Dominion Bank (TD). Nevertheless, I view CM as currently being attractively valued having retraced ~10% subsequent to my September 5th article.

Investors seeking an investment which provides an attractive, safe, and growing dividend may wish to consider CM for their portfolio.

 

Summary

  • CM recently reported FY2018 results and senior management indicated it is confident it can continue to deliver EPS growth within the 5% - 10% medium-term target range.
  • CM is focused on expanding in the U.S. and gains from the PrivateBancorp acquisition are exceeding expectations.
  • With the highest concentration of the Big 5 in Canadian retail loan exposure and in particular uninsured Canadian mortgages, CM is perhaps more vulnerable than its peer group in the event of an economic downturn in Canada.
  • I am confident CM will be able to avoid another ‘landmine’ should the Canadian real estate sector soften significantly come the next economic downturn.
  • CM’s attractive valuation and dividend yield will likely appeal to investors seeking a safe and gradually growing stream of dividend income.

All figures are expressed in CDN $ unless otherwise noted.

Introduction

This fourth article in this series covering the Big 5 Schedule A Canadian banks touches upon The Canadian Imperial Bank of Commerce (TSX: CM); CM released its Q4 and FY2018 earnings on November 29.

Article 1 covered The Bank of Nova Scotia (TSX: BNS), article 2 covered The Royal Bank of Canada (TSX: RY), and article 3 covered The Toronto-Dominion Bank (TSX: TD).

In my September 5th article I indicated various headwinds/uncertainties made me reluctant to acquire additional shares in any of the Big 5 other than through the automatic reinvestment of all dividends; CM’s share price has retraced ~10% subsequent to that article.

Please refer to article 2 in which I cover Canada’s FI landscape.

Please click here to read the complete version of this article.

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Note: I sincerely appreciate the time you took to read this article. Please send any feedback, corrections, or questions to charles@financialfreedomisajourney.com.

Disclaimer: I have no knowledge of your individual circumstances and am not providing individualized advice or recommendations. I encourage you not to make any investment decision without conducting your own research and due diligence. You should also consult your financial advisor about your specific situation.

Disclosure: I am long BMO, BNS, CM, RY, and TD.

I wrote this article myself and it expresses my own opinions. I am not receiving compensation for it and have no business relationship with any company whose stock is mentioned in this article.

By |December 3rd, 2018|General Investing|Comments Off on The Canadian Imperial Bank of Commerce – Attractive Valuation and Dividend Yield

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