Topic: How To Invest

Dividend Advisor Hotline – Friday, January 25, 2019

Article Excerpt

CANADIAN IMPERIAL BANK OF COMMERCE, $110.24, Toronto symbol CM, is the smallest of Canada’s big five banks, with assets of $597.1 billion. CIBC continues to benefit from its June 2017 purchase of Chicago-based PrivateBancorp Inc. for $6.6 billion in cash and stock. That firm mainly lends to small and mid-sized businesses. It also provides wealth management services. Thanks partly to that purchase, the bank’s earnings per share rose 9.9%, from $11.11 in 2017 (fiscal years end October 31) to $12.21. Rising earnings are also giving CIBC more cash for dividends. The bank last raised its quarterly dividend with the October 2018 payment. Investors now receive $1.36 a share, up 2.3% from $1.33. The new annual rate of $5.44 yields a high 4.9%. CIBC is also benefitting from a cost cutting plan. It aims to improve its efficiency ratio (non-interest costs, such as employee salaries, divided by revenue—the lower, the better) from 55.6% in fiscal 2018 to 52.0% in 2022. As a result, the bank expects…