Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM) is expected to release its quarterly results later this month, and with the stock trading near a three-year low, it could be an optimal time to buy.
Over the past six months, CIBC’s stock has fallen by more than 11% and if we look at the last year, it is down 18%. Those are terrible returns for one of Canada’s top banks, and they’re also patterns that are not likely to persist.
It was about a year ago that the stock was trading at more than $120 a share, and even just getting back to those highs could mean significant returns for investors that buy today. While it’s inevitable that we’ll see bank stocks start rallying again, it’s just a question of when that will happen.
Currently, CIBC stock is right around oversold territory with a Relative Strength Index of 32, but the problem is that this hasn’t been new for CIBC over the past year as investors have just not found reasons to buy the stock.
The bank has missed earnings expectations for three quarters in a row now and it’ll need to break that trend if it doesn’t want to risk falling any further down. However, one good reason to own the stock today: its dividend.
With the decline in share price, CIBC is now yielding an incredible 5.6%, which is almost an unheard of return for a bank stock. Even if you aren’t expecting a swift recovery for the stock anytime soon, it may be worth buying and waiting with a dividend that big.
Related Stories
