Canadian Imperial Bank of Commerce's Dividend Analysis
Assessing the Sustainability and Growth of CM's Dividends
Canadian Imperial Bank of Commerce (NYSE:CM) recently announced a dividend of $0.90 per share, payable on 2024-01-29, with the ex-dividend date set for 2023-12-27. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Canadian Imperial Bank of Commerce's dividend performance and assess its sustainability.
What Does Canadian Imperial Bank of Commerce Do?
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Canadian Imperial Bank of Commerce is Canada's fifth-largest bank and operates three business segments: retail and business banking, wealth management, and capital markets. It serves approximately 11 million personal banking and business customers, primarily in Canada.
A Glimpse at Canadian Imperial Bank of Commerce's Dividend History
Canadian Imperial Bank of Commerce has maintained a consistent dividend payment record since 1989. Dividends are currently distributed on a quarterly basis.
Canadian Imperial Bank of Commerce has increased its dividend each year since 2010. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 13 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Canadian Imperial Bank of Commerce's Dividend Yield and Growth
As of today, Canadian Imperial Bank of Commerce currently has a 12-month trailing dividend yield of 5.27% and a 12-month forward dividend yield of 5.48%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Canadian Imperial Bank of Commerce's annual dividend growth rate was 5.70%. Extended to a five-year horizon, this rate decreased to 5.10% per year. And over the past decade, Canadian Imperial Bank of Commerce's annual dividends per share growth rate stands at 6.00%.
Based on Canadian Imperial Bank of Commerce's dividend yield and five-year growth rate, the 5-year yield on cost of Canadian Imperial Bank of Commerce stock as of today is approximately 6.76%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-10-31, Canadian Imperial Bank of Commerce's dividend payout ratio is 0.67.
Canadian Imperial Bank of Commerce's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Canadian Imperial Bank of Commerce's profitability 6 out of 10 as of 2023-10-31, suggesting fair profitability. The company has reported positive net income for each of the years over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Canadian Imperial Bank of Commerce's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Canadian Imperial Bank of Commerce's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Canadian Imperial Bank of Commerce's revenue has increased by approximately 6.70% per year on average, a rate that outperforms approximately 52.73% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Canadian Imperial Bank of Commerce's earnings increased by approximately 11.50% per year on average, a rate that outperforms approximately 59.41% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 4.00%, which outperforms approximately 34.79% of global competitors.
Next Steps
With a strong history of dividend payments, a robust dividend growth rate, a reasonable payout ratio, fair profitability, and solid growth metrics, Canadian Imperial Bank of Commerce presents a compelling case for value investors interested in steady income streams. As the financial sector continues to evolve, Canadian Imperial Bank of Commerce appears well-positioned to maintain its dividend payments, making it a potentially attractive option for dividend-seeking portfolios.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
