Protect Your Wealth With These 3 Wealth Creators

Canadian Imperial Bank of Commerce (TSX:CM) (NYSE:CM) continues to be a top dividend stock that is benefitting from rising interest rates and creating shareholder value.

| More on:

With the volatility in the market today, investors are understandably looking for stocks that are more steady and reliable.

Stocks with a long track record of creating shareholder value and a bright future that will allow them to continue to create shareholder value.

Here I will discuss three such stocks in the Canadian banking industry, an industry that will benefit from rising interest rates through rising net interest margins, although higher rates will also cause credit risk concerns.

Here are three bank stocks that investors can turn to in order to protect their wealth.

Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM)

In the last 10 years, CIBC stock has returned 117%, and although this is the lowest return among the Canadian bank stocks, its dividend has consistently been higher than the rest.

CIBC stock’s dividend yield is currently 4.78%.

During this time, the bank has increased its focus on retail and business banking and now, wealth management. Away from capital markets revenue, thereby reducing the risk to earnings.

The wealth management business is forecast to have robust growth rates as baby boomers are driving demand.

CIBC’s most recent results show continued strong growth, as adjusted EPS came in well above expectations and its dividend was increased once again, this time by 2.3%.

The bank’s interest rate margin increased by 10 basis points to 2.49%.

Toronto-Dominion Bank (TSX:TD)(NYSE:TD)

With total assets of $1.29 trillion, up from $563 billion in 2008, TD has pretty much tied Royal Bank to become Canada’s largest bank by assets.

But TD is not interested in growing for the sake of growing; they are after profitable growth with high returns.

Now let’s take a look at TD stock price action to see how the stock has fared. Not surprisingly, the stock increased a stellar 171% in the last 10 years.

And this is not including dividends, which have grown at a compound annual growth rate of 9.14% in the last ten years.

TD’s strategy has been to focus on the lower risk retail side of the business and continue to expand in the U.S.  The success of this strategy is evidenced by the fact TD Bank is now the sixth largest North American Bank by total assets and by market capitalization.

Royal Bank of Canada (TSX:RY)(NYSE:RY)

With a solid and secure dividend yield of more than 4.12%, Royal Bank stock pays investors to stick with it through market weakness.

The bank is having a very strong start to the year and had a strong 2017, with a 3% dividend increase to $0.94 per share and a share buyback of 9 million shares, which is testament to this strength.

Royal Bank 10-year stock performance is 120%. And this does not include dividends, which have grown at a compound annual growth rate of 6.52% in the last ten years.

Key risks for all bank stocks remain the housing market and consumer indebtedness, but strong capital ratios and balance sheets mean these banks are resilient.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Karen Thomas has no position in any of the stocks mentioned.

More on Dividend Stocks

calculate and analyze stock
Dividend Stocks

This 5.5% Dividend Stock Pays Cash Every Single Month!

This REIT may offer monthly dividends, but don't forget about the potential returns in the growth industry its involved with.

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

How to Use Your TFSA to Earn up to $6,000 Per Year in Tax-Free Passive Income

A high return doesn't mean you have to make a high investment -- or a risky one -- especially with…

Read more »

path road success business
Dividend Stocks

2 High-Yield Dividend Stocks to Buy Hand Over Fist and 1 to Avoid

High yields are great and all, but only if returns come with them. And while two of these might, another…

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

This 7% Dividend Stock Pays Cash Every Month

A high dividend yield isn't everything. But when it pays out each month and offers this stability, it's worth considering!

Read more »

young people stare at smartphones
Dividend Stocks

GST/HST “Vacation”: Everything Canadians Need to Know

The GST/HST "vacation" is a little treat for the holidays, along with a $250 payment. What should you do with…

Read more »

Train cars pass over trestle bridge in the mountains
Dividend Stocks

Is CNR Stock a Buy, Sell, or Hold for 2025?

Can CNR stock continue its long-term outperformance into 2025 and beyond? Let's explore whether now is a good time to…

Read more »

coins jump into piggy bank
Dividend Stocks

The Smartest Dividend Stocks to Buy With $500 Right Now

These top dividend stocks both offer attractive yields and trade off their highs, making them two of the best to…

Read more »

Middle aged man drinks coffee
Dividend Stocks

Here’s the Average TFSA Balance at Age 35 in Canada

At age 35, it might not seem like you need to be thinking about your future cash flow. But ideally,…

Read more »