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Patrick McKeough is one of Canada’s top safe-money advisors. The Wall Street Journal, Forbes and The Hulbert Financial Digest have all recognized his ability to find stocks with hidden value. He is editor and publisher of The Successful Investor, Stock Pickers Digest, Wall Street Stock Forecaster and Canadian Wealth Advisor; inventor of the Quick Profit/Value System and the ValuVesting System™. A best-selling Canadian author, he wrote Riding the Bull, the book that predicted the 1990s stock-market boom.

Canadian Imperial Bank Of Commerce

What is the Canadian Imperial Bank of Commerce?

Canadian Imperial Bank of Commerce (Toronto symbol CM) is one of Canada’s largest banks to invest in, offering a high-dividend yield of 4.8%.

Canadian Imperial Bank of Commerce recently agreed to sell its 41% stake in U.S.-based wealth management firm American Century Investments (ACI) for $1 billion U.S. CIBC was unable to gain full control over ACI, which is why it decided to sell this investment.

CIBC expects to realize a gain of $170 million U.S. when it completes the sale in mid-2016. The deal also frees up cash the bank can use to pursue other acquisitions.

Meanwhile, Canadian Imperial Bank of Commerce has announced several plans to spur its growth, including spending less on branches and expanding its online and mobile-banking systems. It will also consolidate 120 data centres into a single facility.

In all, the bank expects to spend $400 million on these moves over the next three years. But they will cut $600 million from its annual costs by 2019.

These savings will also offset any potential losses on loans to oil and gas producers. At last report, these loans totalled $17.3 billion, which is a moderate 6% of CIBC’s outstanding loans and credit commitments.

Canadian Imperial Bank of Commerce is also seeing lower losses from credit cards, mainly because it sold half of its Aeroplan accounts to TD Bank when TD took over the plan in 2014. As a result, it set aside $771 million for potential bad loans in 2015, down 17.7% from $937 million in 2014.

We consider CIBC a buy, and feel that most Canadian investor should own at least two of Canada’s big-five banks

To determine which stocks are best to invest in, use our three-part Successful Investor philosophy:

1- Invest mainly in well-established companies;
2- Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; the Consumer sector; Finance; Utilities);
3- Downplay or avoid stocks in the broker/media limelight.

Discover how to build a winning stock market portfolio in this free special report, Canadian Stock Market Basics: How to Trade Stocks and Make Good Investments in Canada, from TSI Network

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While several big Canadian banks profit from international expansion, CIBC is succeeding with its focus on the Canadian market. As part of this focus, it’s selling its stake in a U.S. wealth management firm and cutting costs in its Canadian banking business. It has also raised its dividend payout each year since 2011. The sharesread more »

CANADIAN IMPERIAL BANK OF COMMERCE $94 (Toronto symbol CM; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 397.2 million; Market cap: $37.3 billion;Price-to-sales ratio: 3.0; Dividend yield: 4.8%; TSINetwork Rating: Above Average; www.cibc.com) earned $990 million in its fiscal2015 third quarter, which ended July 31, 2015, up 9.0% from $908million a year earlier. Earnings per share gained 9.9%, …read more »

CANADIAN IMPERIAL BANK OF COMMERCE $93 (Toronto symbol CM; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 397.2 million; Market cap: $36.9 billion; Price-to-sales ratio: 3.0; Dividend yield: 4.6%; TSINetwork Rating: Above Average; www.cibc.com) sold half of its Aeroplan accounts to TD Bank (see page 31) when TD took over the plan at the start of 2014.

The sale …read more »

CANADIAN IMPERIAL BANK OF COMMERCE $104 (Toronto symbol CM; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 397.0 million; Market cap: $41.3 billion; Price-to-sales ratio: 2.4; Dividend yield: 3.8%; TSINetwork Rating: Above Average; www.cibc.com) is Canada’s fifth-largest bank, with $405.4 billion of assets.

CIBC prefers to focus on domestic banking instead of international expansion; Canada supplies about 85% of …read more »

Canada’s big five banks will likely report record earnings in 2014, as low interest rates keep fueling loan demand. The improving economy also means the banks are dealing with fewer bad loans, giving them more room for dividend hikes.

Every Canadian investor should own at least two of our banks. For new buying, TD and Bank of Nova Scotia remain …read more »

CANADIAN IMPERIAL BANK OF COMMERCE $98 (Toronto symbol CM; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 397.4 million; Market cap: $38.9 billion; Price-to-sales ratio: 2.3; Dividend yield: 4.1%; TSINetwork Rating: Above Average; www.cibc.com) is Canada’s fifth-largest bank, with $397.1 billion of assets.

CIBC prefers to focus on domestic banking instead of expanding internationally; Canada accounts for around 85% of …read more »

CANADIAN IMPERIAL BANK OF COMMERCE $97 (Toronto symbol CM; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 397.4 million; Market cap: $38.5 billion; Price-to-sales ratio: 2.2; Dividend yield: 4.1%; TSINetwork Rating: Above Average; www.cibc.com) took control of FirstCaribbean, which offers banking services in 17 Caribbean countries, in December 2006. CIBC now holds a 91.7% stake. The region’s slow growth …read more »

CANADIAN IMPERIAL BANK OF COMMERCE $97 (Toronto symbol CM; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 397.4 million; Market cap: $38.5 billion; Price-to-sales ratio: 2.2; Dividend yield: 4.1%; TSINetwork Rating: Above Average; www.cibc.com) took control of FirstCaribbean, which offers banking services in 17 Caribbean countries, in December 2006. CIBC now holds a 91.7% stake. The region’s slow growth …read more »

CANADIAN IMPERIAL BANK OF COMMERCE $89 (Toronto symbol CM; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 399.3 million; Market cap: $35.5 billion; Price-to-sales ratio: 2.1; Dividend yield: 4.3%; TSINetwork Rating: Above Average; www.cibc.com) is the fifthlargest Canadian bank, with $398.4 billion of assets.

CIBC recently launched a new credit card loyalty plan for travellers after it lost the …read more »

February 14, 2014 -  One Comment
Posted by: Pat McKeough

In addition to TD (see page 21), we also like the outlook for Canada’s other four big banks. Each has its particular risks, but all are good choices for long-term growth and income. ROYAL BANK OF CANADA $71 (Toronto symbol RY; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.4 billion; Market cap: $99.4 billion; Price-to-sales ratio: 2.7; Dividendread more »

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