Canadian Imperial Bank of Commerce’s (TSE:CM) Shareholders Will Receive A Bigger Dividend Than Last Year #UKFinance

Canadian Imperial Bank of Commerce’s (TSE:CM) dividend will be increasing from last year’s payment of the same period to CA$0.97 on 28th of January. This makes the dividend yield about the same as the industry average at 4.1%.

View our latest analysis for Canadian Imperial Bank of Commerce

Solid dividend yields are great, but they only really help us if the payment is sustainable.

Canadian Imperial Bank of Commerce has a long history of paying out dividends, with its current track record at a minimum of 10 years. Taking data from its last earnings report, calculating for the company’s payout ratio shows 49%, which means that Canadian Imperial Bank of Commerce would be able to pay its last dividend without pressure on the balance sheet.

Looking forward, EPS is forecast to rise by 16.8% over the next 3 years. The future payout ratio could be 51% over that time period, according to analyst estimates, which is a good look for the future of the dividend.

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2014, the dividend has gone from CA$1.96 total annually to CA$3.88. This works out to be a compound annual growth rate (CAGR) of approximately 7.1% a year over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Canadian Imperial Bank of Commerce has seen EPS rising for the last five years, at 5.3% per annum. The company is paying a reasonable amount of earnings to shareholders, and is growing earnings at a decent rate so we think it could be a decent dividend stock.

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we’ve picked out 1 warning sign for Canadian Imperial Bank of Commerce that investors should know about before committing capital to this stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.