Topic: How To Invest

Dividend Advisor Hotline – Friday, December 16, 2022

Article Excerpt

CANADIAN IMPERIAL BANK OF COMMERCE, $55.44, Toronto symbol CM, remains a buy for long-term gains. CIBC is now raising your quarterly dividend by 2.4% with the January 2023 payment. Investors will then receive $0.85 a share instead of $0.83. The new annual rate of $3.40 yields a high 6.1%. As well, starting with this payment, the bank will let shareholders automatically re-invest their dividends in new common shares at a 2% discount to the market price. The stock has dropped 14% since the start of December, mainly due to concerns that rising interest rates will slow demand for new residential mortgages and refinancing. Those loans account for 55% of its total loan portfolio. As well, rising interest rates and inflation are prompting CIBC to set aside more funds for potential future loan losses. In its fiscal 2022 fourth quarter, ended October 31, 2022, those provisions jumped to $436 million from $78 million a year earlier. CIBC’s recent acquisition of the credit card business of…