Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM) reported earnings on Thursday morning, and results were strong.
The smallest of Canada’s big five banks reported a profit of $931 million in its fourth quarter, up 20% versus the same quarter in 2015, and that was despite a $98-million special charge on various items, mostly employee severance.
Profits for the whole year hit $4.3 billion, up from $3.59 billion last year. Revenue was also up substantially, increasing from $13.86 billion to $15.04 billion. 2016 was the first year CIBC has ever done more than $15 billion in revenue.
Most importantly for dividend investors, CIBC rewarded shareholders with a dividend increase, upping its quarterly payout by three cents a share, from $1.21 to $1.24 per share. The new dividend will start being paid to shareholders on January 31.
2017 will mark the seventh consecutive year CIBC has increased its dividend. Shares currently yield 4.55%.
CIBC has long been criticized for not having a significant U.S. presence, a fault it remedied back in June when it agreed to pay $4.9 billion for Chicago-based PrivateBancorp. The company was reprimanded for overpaying for the asset, however, with analysts expecting the deal won’t be accretive to CIBC’s bottom line until 2018 at the earliest.
CIBC shares were up $2.98 each on news of its earnings beat, increasing 2.8% in Thursday’s trading to $108.98. That’s just a few cents off the 52-week high, which is $109.10.
