Tuesday, October 18, 2016

CIBC - Dividend Analysis

          Canada has 5 big banks which are often regarded as some of the best banks in the world.  These banks are Royal Bank of Canada (RY), Bank of Nova Scotia (BNS), Toronto Dominion Bank (TD), Bank of Montreal (BMO) and Canadian Imperial Bank of Commerce (CM). The ticker symbol for each of these banks is in parentheses.

           Today, we are going to focus on Canadian Imperial Bank of Commerce, commonly know as CIBC.  CIBC has been paying dividends in 1868 and that year is not a typo.  CIBC has not missed a dividend payment in 148 years.  Therefore, CIBC has been paying dividends longer than any current human has been alive.  These dividends are coutesy of the investor relatons site of CIBC and represent the value in Canadian dollars.

Year                   Annual Dividend Amount
 2000                  $1.290  
 2001                  $1.440
 2002                  $1.600
 2003                  $1.640
 2004                  $2.200
 2005                  $2.660
 2006                  $2.760
 2007                  $3.110
 2008                  $3.480
 2009                  $3.480
 2010                  $3.480
 2011                  $3.510
 2012                  $3.640
 2013                  $3.800
 2014                  $3.940
 2015                  $4.300
 2016                  $4.750

As you can see the dividend has increased each year from 2011 to 2016. During the sub prime melton which lead to the global recession, CIBC did not reduce its dividend, but it also did not raise its dividend from 2008-2010.  The other 4 big banks in Canada did the same with no dividend increase or decrease in basically the same time frame. 

With the dividend increasing this much, this also causes the price of the stock to rise as people want the yield.  In order to keep increasing the dividend, the bank has to increase earnings each year as dividends are paid from earnings.

Compound Annual Dividend Growth Rate from 2000 to 2016  is  8.49%.

Compound Annual Dividend Growth Rate from 2010 to 2016  is  5.32 %

Everytime the dividend is raised, an investor gets a raise that is usually higher than you would get at a job.  When the company raises its dividend, an investor does not do anything besides remaining a loyal shareholder.  A dividend growth investor invests in companies that pay dividends and increases their dividend yearly, which helps them to reach financial freedom quicker.

Disclosure:  Do not own any shares of C.I.B.C.

I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.


  1. Canadian banks are great dividend payers. Thanks for sharing CIBCs recent dividend history. I'm going to have to research this one.

    1. Investing Hunting,

      Thanks for dropping by. This stock trades on the Toronto Stock Exchange and NYSE.

  2. Canadian banks have historically done really well, and their reputation is well deserved -- especially if you're a dividend growth investor.

    My only current concern with them is the housing market bubble that will eventually pop. Seeing as the federal government (along with various provincial governments) are starting to take action in order to curb foreign real estate buyers, it's possible that this bubble will burst soon. But then again, they've been saying this for ever now and it seems to never happen. What do you think?

    1. GoGOAssets,

      I do not think we will have a housing bubble anytime soon. Vancouver and Toronto will always have huge housing costs. Cities like Calgary and Fort McMurray, will have home prices reduced as they are heavily involved in the oil and gas industry. OPEC recently stated they expect a larger surplus in 2017 even with there production cap recently announced. That likely means Alberta will suffer another year of high unemployment.