Canadian Imperial Bank of Commerce (TSX:CM) Recent price $88.93 dividend $3.84; yield 4.32%; EPS $8.24; PE 10.8; 52-week high $91.90; 52-week low $73.89; one-year price change +8.0%
CM continues to be a stock with a bargain-basement price, considering its PE ratio of just 10.8 times, compared with the TSX average in the 18 range. And its current yield of 4.32%, before the dividend tax credit, combined with the low price, makes it a buy.
That bargain price is in spite of better earnings in fiscal 2013. CIBC’s earnings are traditionally weak in the first quarter; this year they were down 1% to $1.91 per share from $1.93 in the bad first quarter of last year, when earnings dipped 3% to $1.97 per share.
However, second-quarter earnings were up 12% to $2.12 from $1.90 per share, third-quarter earnings rose 8%, and fourth-quarter earnings were up 1%. For all of fiscal 2013, CM made 5% more than the year before at $8.23 per share from $7.85 per share.
Two updates ago 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 7.46%, the second increase in two updates. In a year the shares are up 8.0%. CIBC is a buy and hold for income and gains.
Money Reporter, MPL Communications Inc.
133 Richmond St.W., Toronto, ON, M5H 3M8. 1-800-804-8846