One of Canada's five largest banks, Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM) recently reported earnings, and much to the cheer of investors, has seen marked improvement in a number of key areas.
The bank reported numbers which largely exceeded expectations, building on strength in the company's mortgage portfolio (lower loan losses) and improving fundamentals from the company's U.S. subsidiary which posted impressive results this past quarter.
A significant amount of attention has been paid to the company's acquisition of Chicago-based Private Bancorp last year, and all seems to be going well with this integration. With CIBC largely lagging its peers in terms of size, scope, and speed of entry into the U.S. market, investors are hoping that the firm's "better late than never" strategy will play out in the years to come.
With CIBC's global expansion looking promising, the lender's core Canadian business remained relatively strong. CIBC's adjusted earnings during this past quarter amounted to $3.18 per share, beating analyst expectations of $2.83 per share by a double digit margin.
Perhaps the biggest news to come out of this earnings release, however, was the company's dividend hike by a little less than 3%, boosting the yield investors can expect to receive to above 4.3%.
As a pure income play, CIBC remains attractive given the 100-basis-point premium the bank has maintained over its peers in terms of yield, as well as the penchant for management to continue raising its dividend despite remaining at elevated levels. While risks remain, CIBC continues to be the best dividend option among the Canadian banks currently.
Invest wisely, my friends.
