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 think it is about time I did.
When I was updating my spreadsheet, I noticed dividend growth has been in the low range for most of the 30 years I have tracked this stock. Most growth was in the 7% range except for the past 5 and 10 years and then the growth was 6.9% and 4.3% per year. Dividend increases with the 2008 problems was flat for almost 4 years. They have a financial year end in October each year so that the last financial year ended October 31, 2018.
Dividend yields are pretty much in the 4% range. The current dividend yield is 4.96%, with 5, 10 and historical dividend yields at 4.53%, 4.79% and 4.34%. Dividend yields are shown below and they are at the top of the 7% range or into the 8% range. So, dividends are moderate and growth is low to moderate.
The Dividend Payout Ratio for 2018 is 46% with 5 year coverage at 46% also. The DPR for CFPS is 24% with 5 year coverage at 38%. The DPR for CFPS excluding WC is 41% with 5 year coverage at 45%.
The debt ratios are fine. The Long Term Debt/Covering Assets Ratio for 2018 is 0.89 with a 5 year median at 0.90. the only other Ratio that really counts for banks is the Debt Ratio and in 2018 it was 1.06 with 5 year median at 1.05.
The Total Return per year is shown below for years of 5 to 31 to the end of 2018. 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 charts below.
I like my stocks to be able to have a total return of at least 8% per year. This bank mostly does this and for the other years, the total return is in the 7% range.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2013 | 5 | 6.96% | 7.19% | 2.31% | 4.88% |
| 2008 | 10 | 4.34% | 13.04% | 7.12% | 5.92% |
| 2003 | 15 | 8.16% | 7.62% | 3.13% | 4.48% |
| 1998 | 20 | 7.73% | 9.67% | 5.04% | 4.62% |
| 1993 | 25 | 8.71% | 13.10% | 7.53% | 5.57% |
| 1988 | 30 | 7.73% | 12.45% | 7.27% | 5.18% |
| 1987 | 31 | 7.47% | 12.07% | 7.07% | 5.00% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 9.48, 10.08 and 10.67. The corresponding 10 year ratios are 9.38, 10.28 and 11.24. The corresponding historical ratios are 8.72. 9.76 and 11.21. The current P/E Ratio is 8.67 based on a stock price of $109.69 and 2019 EPS Ratio of 12.65. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $144.96. The 10 year low, median, and high median Price/Graham Price Ratios are 0.85, 0.94 and 1.04. The current P/GP Ratio is 0.76 based on a stock price of $109.69. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median Price/Book Value per Share Ratio of 1.92. The current P/B Ratio is 1.49 based on a stock price of $109.69, Book Value of $32,693M, and Book Value per Share of $73.83. The current ratio is some 22.7% below 10 year ratio. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 4.34%. The current dividend is 4.96% based on dividends of $3.44 and a stock price of $109.69. The current dividend is 14.27% above the historical dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The 10 year median Price/Sales (Revenue) Ratio is 2.52. The current P/S Ratio is 2.59 based on 2019 Revenue estimate of $18,751M, Revenue per Share of $42.34 and a stock price of $109.69. The current ratio is 2.61% above the 10 year median. This stock price testing suggests that the stock price is relatively reasonable and above (just) the median.
Results of stock price testing is that the one I like the best says that the stock price is reasonable and below the median. The P/S Ratio test says it is above the median and the rest say it is cheap. I would suspect that the stock price is reasonable.
When I look at analysts’ recommendations, I find Strong Buy (2), Buy (5), Hold (5) and Underperform (3). The consensus would be a Hold. The 12 month stock price is $127.40. This implies a total return of $21.10 with 16.15% from capital gains and 4.96% from dividends based on a current Price of $109.69.
Steve Reilly on Post Analysts talks about recent analyst ratings on this stock. Gemma Cottrell on Fairfield Current talks about some institutional investing in this bank. Thomas Auclair on Simply Wall Street thinks this bank is undervalued. Amy Legate-Wolfe on Motley Fool says this bank is in a strong position expand. See what analysts are saying about this bank on Stock Chase. The analysts have mixed views. One says it was the worst preforming bank in 2018.
Canadian Imperial Bank of Commerce is Canada's fifth- largest bank, operating 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, OTC-TCLAF) ... learn more on Wednesday, January 23, 2019 around 5 pm. Tomorrow on my other blog I will write about Why Low Yield Stocks .... learn more on Tuesday, January 22, 2019 around 5 pm.
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