Is it a good company at a reasonable price? In 2023 the stock price increased by 16% and then another 43% in 2024. The Total Return for the past years is 15.84%. It is just off an historical top. If you were going to buy a bank stock, maybe it might be better to buy something else than this stock. The stock price testing is showing the stock as reasonable but above the median. A lot of tests say it is expensive. It is generally not a good time to buy a stock when it is at historical highs.
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 thought I should so I started to track this stock in 2017.
When I was updating my spreadsheet, I noticed shareholders have done well with this stock, especially lately. Look at the Total Return per year in a paragraph below. The lowest total return is 10 years at 10.52% per year and the highest is 15.84% per year for the last 5 years. The 40 year return is close at 14.08% per year. Although I note that the dividend growth for the past 5 years at 5.2% is lower than the dividend growth at 6.2% per year over the past 10 years.
If you had invested in this company in December 2014, for $1,048.32 you would have bought 21 shares at $49.92 per share. In December 2024, after 10 years you would have received $602.07 in dividends. The stock would be worth $1,901.55. Your total return would have been $2,503.62. This would be a total return of 10.52% per year with 6.18% from capital gain and 4.34% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $49.92 | $1,048.32 | 21 | 10 | $602.07 | $1,901.55 | $2,503.62 |
The current dividend yield is moderate with dividend growth low. The current dividend yield is moderate (2% to 4% ranges) at 4.28%. The historical median dividend yield is also moderate at 4.63%. The 5 and 10 year median dividend yields are good (5% to 6% range) at 5.25% and 5.03%. The dividend growth is low (below 8% per year) at 5.2% per year over the past 5 years.
The Dividend Payout Ratios (DPR) are good. The DPR for 2024 for Earnings per Share (EPS) is good at 49% with 5 year coverage high at 54%. The DPR for 2024 for Adjusted Earnings per Share (AEPS) is good at 49% with 5 year coverage at 49%. The DPR for 2024 for Cash Flow per Share (CFPS) is good at 5% with 5 year coverage at 17%. The DPR for 2024 for Free Cash Flow (FCF) is good at 41% with 5 year coverage at 46%. However, again there is no agreement on what the FCF is.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 49.45% | 53.52% |
| AEPS | 48.65% | 49.38% |
| CFPS | 5.41% | 16.88% |
| FCF | 41.27% | 46.08% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2024 is rather high at 93.18 and currently at 90.60. However, we need also to look at the Long Term Debt/Covering Assets Ratio for 2024 which is good at 0.80 and currently at 0.80 because this is a more important one for a financial. The Liquidity Ratio for 2024 is good at 3.38 and 3.38 currently. The Debt Ratio for 2024 is fine for a financial at 1.06 and 1.06 currently. The Leverage Ratio given by the bank for 2024 is 4.3%. The Debt/Equity Ratios for 2024 are good at 18.27 and currently at 18.27.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R A | 0.80 | 0.80 |
| Lg Term R | 93.18 | 90.60 |
| Intang/GW | 1.01 | 0.98 |
| Liquidity | 3.38 | 3.38 |
| Liq. + CF | 4.14 | 4.14 |
| Debt Ratio | 1.06 | 1.06 |
| Leverage Bk | 4.3% | 4.3% |
| Leverage | 19.37 | 19.37 |
| D/E Ratio | 18.27 | 18.27 |
The Total Return per year is shown below for years of 5 to 41 to the end of 2024. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2019 | 5 | 5.15% | 15.84% | 10.97% | 4.87% |
| 2014 | 10 | 6.21% | 10.52% | 6.18% | 4.34% |
| 2009 | 15 | 4.97% | 11.35% | 6.76% | 4.59% |
| 2004 | 20 | 6.11% | 12.98% | 7.57% | 5.40% |
| 1999 | 25 | 7.43% | 11.57% | 6.88% | 4.70% |
| 1994 | 30 | 8.29% | 13.75% | 8.23% | 5.52% |
| 1989 | 35 | 7.26% | 12.65% | 7.76% | 4.89% |
| 1984 | 40 | 6.79% | 14.08% | 8.33% | 5.76% |
| 1983 | 41 | 6.62% | 13.40% | 8.01% | 5.39% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 8.23, 10.57 and 12.46. The corresponding 10 year ratios are 8.01, 9.75 and 11.47. The corresponding Historical ratios are 8.09, 9.72 and 11.13. The current P/E Ratio is 11.94 based on a stock price of $90.55 and EPS estimate for 2025 of $7.58. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 6.97, 9.27 and 11.80. The corresponding 10 year ratios are 7.33, 9.23 and 10.63. The current ratio is 11.62 based on a stock price of $90.55 and AEPS estimate for 2025 of $7.79. The current ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a Graham Price of $100.03. The 10-year low, median, and high median Price/Graham Price Ratios are 0.61, 0.76 and 0.89. The current P/GP Ratio is 0.91 based on a stock price of $90.55. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Book Value per Share Ratio of 1.39. The current P/B Ratio is 1.59 based on a stock price of $90.55, Book Value of $53,789M and Book Value per Share of $57.08. The current ratio is 14% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I also have Book Value per Share estimate for 2025 of $59.96. This implies a ratio of 1.51 based on a stock price of $90.55, and Book Value of $56,500M. This ratio is 8% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10-year median Price/Cash Flow per Share Ratio of 3.23. The current P/CF Ratio is 7.70 based on Cash Flow for the last 12 months of $11,088M, Cash Flow per Share of $11.77 and a stock price of $90.55. The current ratio is 138% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 4.63%. The current dividend yield is 4.28% based on dividends of $3.88 and a stock price of $90.55. The current dividend yield is 7% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10 year median dividend yield of 5.03%. The current dividend yield is 4.28% based on dividends of $3.88 and a stock price of $90.55. The current dividend yield is 15% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.
The 10-year median Price/Sales (Revenue) Ratio is 2.65. The current P/S Ratio is 3.13 based on Revenue estimate for 2025 of $27,232. The current ratio is 18% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
Results of stock price testing is that the stock price is probably still reasonable, but at the high end of the reasonableness scale. The 10 year dividend yield test says that the stock price is reasonable but above the median. The P/S Ratio test says the same. However, a number of tests suggests that the stock price is relatively expensive.
When I look at analysts’ recommendations, I find Strong Buy (3), Buy (6), Hold (4), Underperform (1) and Sell (1). The consensus would be a Buy. The 12 month stock price consensus is $98.61 with a high of $114.00 and low of $70.00. The 12 month stock price consensus of $98.61 implies a total return of 13.19% with 8.90% from capital gains and 4.28% from dividends.
The most recent analyst recommendation at Stock Chase for this bank gives the bank a Hold. The recommendations for 2024 were a mixed bag from Sell to Buy and all in between. Stock Chase gives this stock 5 stars out of 5. A worry is that the bank is exposed to Real Estate in Canada. Amy Legate-Wolfe on Motley Fool thinks you should take a look at this bank because of a decent Payout Ratio. Christopher Liew on Motley Fool thinks this bank is worth buying as it just raised its dividends and it has a long history of paying dividends. The bank put out a press release via Newswire about their fourth quarter of 2024.
Simply Wall Street via Yahoo Finance talks about dividend payments by this bank. They have no warnings out on this bank. Simply Wall Street gives this bank 4 stars out of 5.
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. Its web site is here Canadian Imperial Bank of Commerce.
The last stock I wrote about was about was National Bank of Canada (TSX-NA, OTC-NTIOF) ... learn more. The next stock I will write about will be Transcontinental Inc (TSX-TCL.A, OTC-TCLAF) ... learn more on Wednesday, January 22, 2025 around 5 pm. Tomorrow on my other blog I will write about Talking About My Blog.... learn more on Tuesday, January 21, 2025 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
No comments:
Post a Comment