Is it a good company at a reasonable price? Even though this stock is off the lowest of 2023, it is still quite reasonably priced. This is not my favourite bank; however, shareholders have done reasonably well with this bank (see total return chart below). It is on the Money Sense Dividend and Dividend Aristocrat lists that I follow. Stock price testing says the stock price is reasonable and below the median.
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 since its low in October 2023, the stock price of this bank has climbed 27%. Year to date, this bank is down around 4%.
If you had invested in this company in December 2013, for $1,043.28 you would have bought 23 shares at $45.36 per share. In December 2023, after 10 years you would have received $621.92 in dividends. The stock would be worth $1,419.10. Your total return would have been $2,041.02. This is a total return would be a total return of 8.48% per year with 3.45% from capital gain and 5.01% from dividends. These calculations take into consideration stock splits.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $45.36 | $1,043.28 | 23 | 10 | $621.92 | $1,419.10 | $2,041.02 |
If you had invested in this company in December 1993, for $1,001.88 you would have bought 121 shares at $8.28 per share. In December 2023, after 30 years you would have received $5,921.14 in dividends. The stock would be worth $7,465.70. Your total return would have been $13,386.84. This is a total return would be a total return of 12.88% per year with 7.04% from capital gain and 5.83% 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 |
|---|---|---|---|---|---|---|
| $8.28 | $1,001.88 | 121 | 30 | $5,921.14 | $7,465.70 | $13,386.84 |
The current dividend yield is good with dividend growth low. The current dividend yield is good (5% to 6% ranges) at 5.67%. The 5 year median dividend yield is good at 5.65%. The 10 year and historical median dividend yields are moderate (2% to 4% ranges) at 4.83% and 4.61%. The dividend growth over the past 5 years is low (below 8%) at 5.3% per year. The last dividend increase was in 2023 and it was for 2.35%. However, this bank has often raised dividends 2 or 3 times in a year.
The Dividend Payout Ratios (DPR) are fine. The DPR for 2023 for Earnings per Share (EPS) is fine at 67% with 5 year coverage at 54%. The DPR for 2023 for Adjusted Earnings per Share (AEPS) is fine at 51% with 5 year coverage at 49%. The DPR for 2023 for Cash Flow per Share (CFPS) is fine at 40% with 5 year coverage at 43%. The DPR for 2023 for Free Cash Flow (FCF) is good at 21% with 5 year coverage at 12%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 66.67% | 53.88% |
| AEPS | 51.19% | 49.04% |
| CFPS | 40.44% | 42.98% |
| FCF | 20.30% | 12.03% |
Debt Ratios are fine. The Long Term Debt/Covering Assets Ratio for 2023 is good at 0.81. Long Term Debt/Market Cap Ratio is not important for banks. The Liquidity Ratio for 2023 is good at 5.07. The Debt Ratio for 2023 is fine for a bank at 1.06 and it is the most important one.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R A | 0.81 | 0.81 |
| Lg Term R | 15.88 | 12.66 |
| Intang/GW | 0.18 | 0.14 |
| Liquidity | 5.07 | 5.07 |
| Liq. + CF | 5.88 | 5.88 |
| Debt Ratio | 1.06 | 1.06 |
The Total Return per year is shown below for years of 5 to 40 to the end of 2023. 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. |
|---|---|---|---|---|---|
| 2018 | 5 | 5.28% | 10.14% | 4.65% | 5.50% |
| 2013 | 10 | 6.12% | 8.48% | 3.47% | 5.01% |
| 2008 | 15 | 4.65% | 12.31% | 6.29% | 6.02% |
| 2003 | 20 | 7.43% | 8.05% | 3.51% | 4.54% |
| 1998 | 25 | 7.23% | 9.72% | 4.96% | 4.76% |
| 1993 | 30 | 8.13% | 12.88% | 7.04% | 5.83% |
| 1988 | 35 | 7.38% | 12.32% | 6.89% | 5.42% |
| 1983 | 40 | 6.67% | 13.18% | 7.26% | 5.91% |
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 8.46, 10.33 and 11.47. The corresponding historical ratios are 8.23, 9.74 and 11.06. The current P/E ratio is 9.50 based on a stock price of $61.37 and EPS estimate for 2024 of $6.46. The current ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Earnings per Share Ratios are 6.97, 8.70 and 10.47. The corresponding 10 year ratios are 7.83, 9.32 and 10.63. The current P/AEPS Ratio is 9.37 based on a stock price of $61.37 and AEPS for 2024 of $6.55. This 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 $87.22. The 10-year low, median, and high median Price/Graham Price Ratios are 0.65, 0.79 and 0.90. The current P/GP Ratio is 0.70 based on a stock price of $61.37. The current ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10-year median Price/Book Value per Share Ratio of 1.47. The current P/B Ratio is 1.19 based on a Book Value of $48,058M, Book Value per Share of $51.61 and a stock price of $61.37. The current ratio is 19% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I also have a Book Value per Share estimate for 2024 of $54.90. This implies a ratio of 1.12 based on stock price of $61.37 and a Book Value of $51,117M. This ratio is 24% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get a 10-year median Price/Cash Flow per Share Ratio of 2.59. The current P/CF Ratio is 4.70 based on Cash Flow for the last 12 months of $12,154, Cash Flow per Share of $13.05 and stock price of $61.37. the current ratio is 81% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. However, analysts tend to ignore cash flows for banks.
I get an historical median dividend yield of 4.61%. The current dividend yield is 5.67% based on dividends of $3.48 and a stock price of $61.37. The current dividend yield is 23% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median dividend yield of 4.83%. The current dividend yield is 5.67% based on dividends of $3.48 and a stock price of $61.37. The current dividend yield is 17% above the 10 year median 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 2.76. The current P/S Ratio is 2.37 based on Revenue estimate for 2024 of $24,141M, Revenue per Share of $25.93 and a stock price of $61.37. The current ratio is 14% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
Results of stock price testing is that the stock price is probably reasonable and below the median. The 10 year median dividend yield test says this and it is confirmed by the P/S Ratio test. The historical median dividend yield test says the stock price is cheap. Most of the other testing is saying that the stock price is reasonable.
When I look at analysts’ recommendations, I find Buy (3), Hold (9) and Sell (1). The consensus would be a Hold. The 12 month stock price consensus is $63.00 with a high of $71.00 and a low of $50.00. The consensus stock price implies a total return of 8.33% with 5.67% from dividends and 2.66% from capital gains.
The two recommendations on Stock Chase for this stock in 2024 are Buys, but late in 2023 there were two Do Not Buys Stock Chase gives this stock 5 stars out of 5. Adam Othman on Motley Fool thinks now is the time to buy this stock. Amy Legate-Wolfe on Motley Fool discusses how to get $1.2M in a TFSA in 10 years with this stock. The company put out a press release on Newswire about their 2023 annual results.
Simply Wall Street via Yahoo Finance put out a report on this bank. Simply Wall Street gives this stock 3 and one half stars out of 5. They have one risk factor of Shareholders have been diluted in the past year.
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 Monday, January 22, 2024 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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