Is it a good company at a reasonable price? What is see is that the stock price is growing faster than EPS. EPS is growing faster than Revenue. Neither is sustainable. Banks have been a good investment for me. Finance is where the money is. I do not have this bank. Canadian banks have delivered over the long term my requirement of 8% per year in capital gains and dividends. They all seem overpriced at this point in time. I would not sell, but neither would I buy. This bank is testing as relatively expensive.
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 that this stock has also take off this year and reached an all time high. This stock was up 37% in 2025 after rising 43% in 2024. The increase in the stock price seems out of line with other years. The capital gain for the last 5 years is 18% per year. The capital gain for the last 10 years is now 10% per year. For other long term periods, the capital gain is 6% to 8% per year. See the paragraph below on Total Return per Year.
If you had invested in this company in December 2015, for $1,003.09 you would have bought 22 shares at $45.60 per share. In December 2025, after 10 years you would have received $669.13 in dividends. The stock would be worth $2,813.14. Your total return would have been $3,482.27. This would be a total return of 14.86% per year with 10.58% from capital gain and 4.30% from dividends. This calculation takes into consideration stock splits, which means that the original cost would be lowered by these splits.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $45.60 | $1,003.09 | 22 | 10 | $669.13 | $2,813.14 | $3,482.27 |
The current dividend yield is moderate with dividend growth low. The current dividend yield is moderate (2% to 4% ranges) at 3.41%. The 5 and historical median dividend yields are also moderate at 4.66% and 4.61%. The 10 year median dividend yield is good (5% to 6% ranges) at 5.03%. The dividend growth is low (below 8% per year) at 2.9% per year over the past 5 years. The last dividend increase was good (8% to 14% per year) at 10.31%. This increase occurred in 2025. This bank seems to only increase its dividends once a year. Most other banks do a couple to several a year.
The Dividend Payout Ratios (DPR) are good. The DPR for 2025 for Earnings per Share (EPS) is good at 45% with 5 year coverage at 49%. The DPR for 2025 for Adjusted Earnings per Share (AEPS) is good at 45% with 5 year coverage at 46%. The DPR for 2025 for Cash Flow per Share (CFPS) is good at 38% with 5 year coverage at 41%. The DPR for 2025 for Free Cash Flow (FCF) is good at 34% with 5 year coverage at 17%. There is only one FCF value for 2025.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 45.27% | 49.43% |
| AEPS | 45.06% | 46.39% |
| CFPS | 38.34% | 41.44% |
| FCF | 34.35% | 16.76% |
Debt Ratios are good. The Long Term Debt/Market Cap Ratio for 2025 is high at 7.50 and currently at 6.82. However, we need also to look at the Long Term Debt/Covering Assets Ratio for 2025 which is good at 0.79 and currently at 0.79 because this is a more important ratio for a financial. The Liquidity Ratio for 2025 is good at 2.79 and 2.79 currently. However, this is not an important ratio for a bank. The Debt Ratio for 2025 is fine for a bank at 1.06 and 1.06 currently. The Leverage Ratio for 2025 is good at 4.3% and currently at 4.3%.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R A | 0.79 | 0.79 |
| Lg Term R | 7.50 | 6.82 |
| Intang/GW | 0.08 | 0.07 |
| Liquidity | 2.79 | 2.79 |
| Liq. + CF | 3.44 | 3.42 |
| Debt Ratio | 1.06 | 1.06 |
| Leverage Bk | 4.3% | 4.3% |
The Total Return per year is shown below for years of 5 to 42 to the end of 2025. 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. |
|---|---|---|---|---|---|
| 2020 | 5 | 5.92% | 22.60% | 18.01% | 4.58% |
| 2015 | 10 | 6.16% | 14.86% | 10.56% | 4.30% |
| 2010 | 15 | 5.49% | 11.92% | 8.01% | 3.91% |
| 2005 | 20 | 5.50% | 9.56% | 6.08% | 3.48% |
| 2000 | 25 | 7.44% | 10.68% | 6.94% | 3.74% |
| 1995 | 30 | 8.15% | 13.50% | 8.71% | 4.79% |
| 1990 | 35 | 7.30% | 13.41% | 8.73% | 4.68% |
| 1985 | 40 | 6.99% | 12.51% | 8.19% | 4.32% |
| 1983 | 42 | 6.65% | 13.60% | 8.62% | 4.98% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 8.69, 10.57 and 12.46. The corresponding 10 year ratios are 8.01, 9.75 and 11.48. The corresponding historical ratios are 8.23, 9.74 and 11.21. The current ratio is 13.42 based on a stock price of $125.41 and ESP estimate for 2026 of $9.35. The current ratio is above the high ratio of the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. Since the ratios are rather consistent, it makes this a good test.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Earnings per Share Ratios are 7.17, 9.27 and 11.80. The corresponding 10 year ratios are 7.33, 9.23 and 10.63. The corresponding historical ratios are 8.19, 9.43 and 11.32. The current ratio is 13.17 based on a stock price of $125.41 and ESP estimate for 2026 of $9.52. The current ratio is above the high ratio of the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $115.55. The 10-year low, median, and high median Price/Graham Price Ratios are 0.61, 0.76 and 0.89. The current ratio is 1.09 based on a stock price of $125.41. The current ratio is above the high ratio of the 10 year median ratio. 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 2.01 based on a Book Value of $57,560M, Book Value per Share of $62.33 and a stock price of $125.41. The current ratio is 44% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I also have a Book Value per Share estimate for 2026 of $66.27. This implies a ratio of 1.89 based on a stock price of $125.41 and a Book Value of $61,407M. This ratio is 36% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Cash Flow per Share Ratio of 3.99. The current ratio is 8.40 based on Cash Flow for the last 12 month of $13,838M, Cash Flow per share of $14.93 and a stock price of $125.41. The current ratio is 111% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. However, this is generally not a good test for banks as the Cash Flow for banks fluctuates a lot. If you look for estimate for Cash Flow for banks, I have never found any.
I get an historical median dividend yield of 4.61%. The current dividend yield is 3.41% based on dividends of $4.28 and a stock price of $125.41. The current dividend yield is 26% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median dividend yield of 5.03%. The current dividend yield is 3.41% based on dividends of $4.28 and a stock price of $125.41. The current dividend yield is 32% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
The 10-year median Price/Sales (Revenue) Ratio is 2.66. The current P/S Ratio is 3.78 based on Revenue estimate for 2026 of $30,759M, Revenue per Share of $33.20 and a stock price of $125.41. The current ratio is 42% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
Results of stock price testing is that the stock price is probably expensive. The dividend yield testing is saying this and it is confirmed by the P/S Ratio test. All my testing is pointing to a stock price that is relatively expensive. I would rate this a Hold.
When I look at analysts’ recommendations, I find Strong Buy (4), Buy (3), Hold (7) and Underperform (2). The consensus is a Buy. The 12 month stock price consensus is $125.38 with a high of $138.00 and low of $100.00. The 12 month stock price of $125.38 implies total return 3.39% with a capital loss of $0.02% and dividends of 3.41% based on a current stock price of $125.41. I think that the consensus stock price points to a Hold rating, not a Buy Rating.
Some analyst on Stock Chase think this bank is still a buy, but others say partial sell because of its high valuation. Amy Legate-Wolfe on Motley Fool think this bank is still a buy because of decades of delivering dividends and has a strong Canadian core. Joey Frenette on Motley Fool says he is a big fan of big banks for their dividends and momentum. The bank put at a press release via Newswire about their fourth quarter of 2025.
Simply Wall Street via Yahoo Finance reviews this stock and looks to see if it is under or overvalued or just right. Simply Wall Street lists no risks for this bank.
Canadian Imperial Bank of Commerce is Canada's fifth-largest bank. It operates four business segments: Canadian retail and business banking, Canadian commercial banking and wealth management, US commercial banking and wealth management, and capital markets. It services Canada and US. 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 Friday, January 23, 2026 around 5 pm. Tomorrow on my other blog I will write about Wolf of Oakville .... learn more on Thursday, January 22, 2026 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.
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