We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Canadian Imperial Bank (CM) is a Top Dividend Stock for Your Portfolio
Read MoreHide Full Article
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Canadian Imperial Bank in Focus
Canadian Imperial Bank (CM - Free Report) is headquartered in Toronto, and is in the Finance sector. The stock has seen a price change of 17.89% since the start of the year. Currently paying a dividend of $1.12 per share, the company has a dividend yield of 4.46%. In comparison, the Banks - Foreign industry's yield is 1.76%, while the S&P 500's yield is 1.38%.
In terms of dividend growth, the company's current annualized dividend of $4.49 is up 3.1% from last year. Canadian Imperial Bank has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 4.83%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Right now, Canadian Imperial Bank's payout ratio is 60%, which means it paid out 60% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for CM for this fiscal year. The Zacks Consensus Estimate for 2021 is $9.88 per share, which represents a year-over-year growth rate of 37.03%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that CM is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Canadian Imperial Bank (CM) is a Top Dividend Stock for Your Portfolio
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Canadian Imperial Bank in Focus
Canadian Imperial Bank (CM - Free Report) is headquartered in Toronto, and is in the Finance sector. The stock has seen a price change of 17.89% since the start of the year. Currently paying a dividend of $1.12 per share, the company has a dividend yield of 4.46%. In comparison, the Banks - Foreign industry's yield is 1.76%, while the S&P 500's yield is 1.38%.
In terms of dividend growth, the company's current annualized dividend of $4.49 is up 3.1% from last year. Canadian Imperial Bank has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 4.83%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Right now, Canadian Imperial Bank's payout ratio is 60%, which means it paid out 60% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for CM for this fiscal year. The Zacks Consensus Estimate for 2021 is $9.88 per share, which represents a year-over-year growth rate of 37.03%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that CM is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).