Yahoo Finance Canadian Imperial Bank of Commerce (TSE:CM) Is Paying Out A Larger Dividend Than Last Year
Canadian Imperial Bank of Commerce's (TSE:CM) dividend will be increasing to CA$1.61 on 28th of January. The announced payment will take the dividend yield to 4.2%, which is in line with the average for the industry.
See our latest analysis for Canadian Imperial Bank of Commerce
Canadian Imperial Bank of Commerce's Dividend Is Well Covered By Earnings
We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. Based on the last payment, Canadian Imperial Bank of Commerce's earnings were much higher than the dividend, but it wasn't converting those earnings into cash flow. In general, we consider cash flow to be more important than earnings, so we would be cautious about relying on the sustainability of this dividend.
Looking forward, earnings per share is forecast to fall by 1.8% over the next year. If the dividend continues along the path it has been on recently, we estimate the payout ratio could be 46%, which is comfortable for the company to continue in the future.
Canadian Imperial Bank of Commerce Has A Solid Track Record
The company has an extended history of paying stable dividends. The dividend has gone from CA$3.48 in 2011 to the most recent annual payment of CA$6.44. This works out to be a compound annual growth rate (CAGR) of approximately 6.3% a year over that time. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.
Canadian Imperial Bank of Commerce Could Grow Its Dividend
The company's investors will be pleased to have been receiving dividend income for some time. Canadian Imperial Bank of Commerce has impressed us by growing EPS at 5.3% per year over the past five years. The company is paying out a lot of its cash as a dividend, but it looks okay based on the payout ratio.
Our Thoughts On Canadian Imperial Bank of Commerce's Dividend
Overall, we always like to see the dividend being raised, but we don't think Canadian Imperial Bank of Commerce will make a great income stock. While Canadian Imperial Bank of Commerce is earning enough to cover the payments, the cash flows are lacking. We would be a touch cautious of relying on this stock primarily for the dividend income.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Earnings growth generally bodes well for the future value of company dividend payments. See if the 11 Canadian Imperial Bank of Commerce analysts we track are forecasting continued growth with our free report on analyst estimates for the company. We have also put together a list of global stocks with a solid dividend.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
