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

Dividend Stocks

The 2 Best Canadian Blue-Chip Stocks to Buy Now

Blue-chip stocks can be some of the best stocks to have in any portfolio. But when they're trending upwards, investors…

Read more »

Canadian dollars in a magnifying glass
Dividend Stocks

Here Are My Top 3 Dividend Stocks to Buy Now

These top dividends stocks have consistently paid and increased their dividends. Further, this trend will continue.

Read more »

dividends can compound over time
Dividend Stocks

Want a 7% Yield? The 3 TSX Stocks to Buy Today

These TSX stocks are offering high yields of over 7%, making them attractive for investors seeking steady passive income.

Read more »

how to save money
Dividend Stocks

The Smartest Dividend Stocks to Buy With $200 Right Now

These smartest dividend stocks can consistently pay and increase their dividends in the coming years, irrespective of the macro uncertainty.

Read more »

Electricity transmission towers with orange glowing wires against night sky
Dividend Stocks

3 Utility Stocks That Are Smart Buys for Canadians in November

These utility stocks benefit from regulated businesses and generate predictable cash flows that support higher dividend payouts.

Read more »

Start line on the highway
Dividend Stocks

Invest $10,000 in This Dividend Stock for $600 in Passive Income

Do you want to generate passive income? Forget the rental unit! This option will save you the mortgage yet still…

Read more »

Senior uses a laptop computer
Dividend Stocks

1 Reliable Dividend Stock for the Ultimate Retirement Income Stream

TD Bank (TSX:TD) shares are way too cheap with way too swollen a yield for retirees to pass up right…

Read more »

A worker drinks out of a mug in an office.
Dividend Stocks

Is Brookfield Infrastructure Partners a Buy for its 4.75% Yield?

Brookfield Infrastructure Partners (BIP) has a 4.75% dividend yield. Is it worth it?

Read more »