New Stock Purchase: CIBC

Hello everyone. I bought another bank stock. I mentioned, at the end of last year, about my plans for investing new money in Canadian Banks. Since then, I’m already invested in TD, RBC, LB, and now CIBC. Canadian Imperial Bank of Commerce is the fifth largest bank in Canada. I bought CIBC for its cheap valuation and my portfolio diversification.

CIBC valuation & performance
At this time, CIBC trades at very cheap multiples. The P/E ratio is at 9.3 – the lowest multiple among its peers and its own historical average. The P/B ratio is at 1.4 vs the industrial average of 1.7. CIBC also has the highest dividend yield compared to other banks. The current dividend yield is at 5.3% supported by a safe payout ratio of 48%. CIBC also has a great track record of increasing the dividend. In the last 3 years, the bank has raised the dividend six times.

Stock Purchase
On June 21, 2019, I purchased 8 shares of CIBC for $105.28 per share. The bank pays $1.40 in dividends every three months. Therefore, by adding 8 shares to my portfolio, I will increase my dividend income by $11.20 per quarter or by $44.80 annually.

Portfolio Value Update - May 2019

Portfolio Value
WOW! Time flies. It’s already June 3rd and I’m due for May update. In May, my portfolio value increased by $79 to $72,325. It’s not much but it’s still an increase. At some point in May, the portfolio value was getting close to $74K, however last week the stock market was volatile and my portfolio paid the price. Stocks got cheaper, but that’s perfect for me because I’ll pick up more stocks at a better price.