CIBC still a bargain with a good yield

Money Reporter, MPL Communications Inc.
133 Richmond St.W., Toronto, ON, M5H 3M8. 1-800-804-8846

Canadian Imperial Bank of Commerce (TSX:CM) Recent price $82.76 dividend $3.84; yield 4.64%; EPS $8.21; PE 10.1; 52-week high $84.99; 52-week low $73.89; one-year price change +7.7%

CM continues to be a stock with a bargain-basement price, considering its PE ratio of just 10.1 times, compared with the TSX average in the 18 range. And its current yield of 4.64%, before the dividend tax credit, combined with the low price, makes it a buy.

That bargain price is due in part to fiscal 2012, when earnings were only ahead 7% to $8.07 from $7.57 per share; a weak first quarter was the most responsible. That 7% was the lowest earnings gain among the Big Six, So how about this year’s first three quarters?

First-quarter 2013 earnings were down 1% to $1.91 per share from $1.93 in the bad first quarter of last year, but in the second quarter earnings were up 12 to $2.12 from $1.90 per share. In the third quarter earnings rose 8% to $2.16 per share from $2.00. So, all told, in nine months CM’s earnings are 6.17% ahead ofwhere they were last year at the three-quarter pole.

Last update the dividend was increased to $3.84 per share from $3.76 per share, which itself was an increase effective of the third quarter last year.

In three months the stock price is up 12.00%, after being down 1.57% heading into last update. In a year the shares are up 7.7%. CIBC is a buy and hold for income and gains. It is cheap even with the 12% gain.


Money Reporter, MPL Communications Inc.
133 Richmond St.W., Toronto, ON, M5H 3M8. 1-800-804-8846

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