Canadian Imperial Bank of Commerce (CM)
While the International Monetary Fund believes the Canadian economy will grow by 2.2% in 2014, it’s important to remember that rising house prices, along with record levels of debt, makes it harder for every Canadian bank to grow their personal lending businesses.
CM, therefore, potentially has the most to lose from any real estate slowdown.
Nonetheless, analysts expect CM to deliver a 5.4% year-over-year increase in adjusted net income to C$995 million, which isn’t half bad, although much less robust than its three bigger competitors. In its second quarter, CM increased its dividend by 2 cents to C$0.96 per share. The bank has averaged one dividend increase per year in recent history, so I’m doubtful that it will do anything when it announces earnings tomorrow.
I would, however, look for Canadian Imperial Bank of Commerce to continue buying back its stock after it initiated an 8 million-share buyback at the end of August.
CM Rating: 7