CIBC came out with third quarter earnings today and they topped analyst expectations handily, by an additional 13 cents per share over the amount expected.
The big question on Canadian investors’ minds, though, is when CIBC can finally begin raising its dividend again. Right now CIBC is paying 87 cents a share and has been for at least two years. The current yield is about 5.2%.
Which Canadian Bank Will Hike Dividends First?
CIBC’s Next Dividend Increase
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According to a conference call that Paul Bagnell (BNN) listened to on August 25th, investors interested in the next dividend increase need to pay attention to CIBC’s profit levels for any signs of when the next dividend raise might come.
CIBC’s CEO says that profits need to increase to a point where the overall payout ratio (the amount of profits paid out as dividends) can decrease to CIBC’s target payout ratio, which is between 40-50%.
Right now CIBC’s current payout ratio is at 56.7%. The CEO says that once their payout decreases below the 40% mark, that’s a sure sign that CIBC will be ready to increase its dividend again.
One factor determining how fast profits can increase at CIBC is the amount of money they need to set aside for loan losses. One good sign is that provisions for credit losses have been decreasing dramatically both year over year as well as sharply down from the second quarter. The less money CIBC needs to set aside for credit losses, the more it can retain in profits, and the sooner it can pay that dividend increase.
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Great website , have got lot of information from this site.
Money is an important thing in our daily life no doubt, but you also have to know the policies to earn it and how can you manage it.
This is an amazing website, I never even thought of buying CIBC as a dividend paying stock. Sure I’ve looked at TD Bank, Royal Bank & Bank of Montreal with its nice 5% dividend yield.
BusinessWeek writes this: Sept. 8 (Bloomberg) — National Bank of Canada, Bank of Nova Scotia, Royal Bank of Canada and Toronto-Dominion Bank may end the longest dividend freeze by Canada’s biggest banks in more than a decade by announcing payout increases as early as December.
Bank of Montreal and Canadian Imperial Bank of Commerce will lag behind their rivals, with dividend increases later in 2011 and in 2012, based on the Bloomberg Dividend Forecast, which had an accuracy rate of 81 percent in the second quarter.
Money is energy, as the site says. the more money, more is the energy. hence earn it any way you can.
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