The S&P/TSX Composite Index has dropped 6.2% in 2018 as of close on November 29. The index has enjoyed a marginal rebound after a speech by U.S. Federal Reserve chairman Jerome Powell which called into question the rate tightening path in 2019.
This could alleviate some pressure from the Bank of Canada, which has also opted for gradual rate hikes over the past several years.
Bank earnings season has also provided a boost in the heavily weighted financials sector. Today I want to focus on a bank stock that still boasts one of the top dividend yields; Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM).
CIBC released its fourth-quarter and full-year results for 2018 on November 29. Growth in its retail banking and wealth management divisions powered an 8% year-over-year increase in earnings. It posted earnings per share of $3.00 which fell short of consensus estimates. For the full-year, CIBC reported net income of $5.5 billion compared to $4.7 billion in 2017.
The bank last announced a quarterly dividend of $1.36 per share. This represents an attractive 4.7% yield. Shares dipped 3.21% on the earnings miss. The stock has now dropped 8.2% in 2018 so far.
Even after the drop, CIBC last posted an RSI of 40. Value investors may want to wait for the stock to challenge 52-week lows in the $110 range before jumping in.
Among the Big Six banks, CIBC continues to offer the best income in a volatile market.
