Should Income Investors Buy Canadian Imperial Bank of Commerce (TSE:CM) Today And Lock In The 4.26% Dividend Yield?
Canadian Imperial Bank of Commerce (TSX:CM) is a true Dividend Rock Star. Its yield of 4.26% makes it one of the market’s top dividend payer. In the past ten years, Canadian Imperial Bank of Commerce has also grown its dividend from 3.48 to 5.2. Below, I have outlined more attractive dividend aspects for Canadian Imperial Bank of Commerce for income investors who may be interested in new dividend stocks for their portfolio. See our latest analysis for Canadian Imperial Bank of Commerce
What Is A Dividend Rock Star?
It is a stock that pays a reliable and steady dividend over the past decade, at a rate that is competitive relative to the other dividend-paying companies on the market. More specifically: Its annual yield is among the top 25% of dividend payers It has paid dividend every year without dramatically reducing payout in the past Its has increased its dividend per share amount over the past It can afford to pay the current rate of dividends from its earnings It has the ability to keep paying its dividends going forward
High Yield And Dependable
The company’s dividend yield stands at 4.26%, which is high for Banks stocks. But the real reason Canadian Imperial Bank of Commerce stands out is because it has a proven track record of continuously paying out this level of dividends, from earnings, to shareholders and can be expected to continue paying in the future. This is a highly desirable trait for a stock holding if you’re investor who wants a robust cash inflow from your portfolio over a long period of time.
If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. CM has increased its DPS from CA$3.48 to CA$5.2 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes CM a true dividend rockstar. Canadian Imperial Bank of Commerce has a trailing twelve-month payout ratio of 45.11%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 47.35%, leading to a dividend yield of 4.49%. Moreover, EPS is forecasted to fall to CA$11.17 in the upcoming year.
Next Steps:
Investors of Canadian Imperial Bank of Commerce can continue to expect strong dividends from the stock. With its favorable dividend characteristics, if high income generation is still the goal for your portfolio, then Canadian Imperial Bank of Commerce is one worth keeping around. However, given this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. I’ve put together three key factors you should look at:
1. Future Outlook: What are well-informed industry analysts predicting for CM’s future growth? Take a look at our free research report of analyst consensus for CM’s outlook.
2. Valuation: What is CM worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether CM is currently mispriced by the market.
3. Other Dividend Rockstars: Are there strong dividend payers with better fundamentals out there? Check out our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
