When you think about long-term wealth building, bank stocks don’t always get the spotlight. But over time, few sectors have delivered the kind of steady returns and reliable dividends that Canadian banks have. One bank in particular stands out right now for investors with a long time horizon: Canadian Imperial Bank of Commerce (TSX:CM).
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About CIBC
CIBC has been around for over 150 years, and in that time, it’s built a reputation as a stable, income-generating financial institution. It’s one of the “Big Five” Canadian banks, and while it’s often seen as more conservative compared to peers, that’s not a bad thing, especially when the goal is to build and preserve wealth over decades.
As of writing, CIBC stock trades at $93, down about 3% from its 52-week high of $95.50. This pullback isn’t dramatic, but it still gives investors a chance to buy one of Canada’s largest banks at a discount. What’s more striking is the rebound it’s staged since bottoming at $64.47 within the last year. That’s a gain of over 40%. The market is clearly regaining confidence in CIBC’s outlook, but it may not have fully priced in its long-term potential just yet.
The numbers
CIBC’s latest quarterly results help explain the optimism. For the first quarter of 2025, CIBC posted adjusted earnings per share of $2.20, a 22% increase from the same period a year ago. Revenue rose to $7.3 billion, up 17% year over year, showing strength across all business units. Adjusted return on equity came in at 15.3%, a strong figure that indicates CIBC is using shareholder money efficiently to generate profits.
One of the things that makes bank stocks appealing in tough times is their capital strength, and here, CIBC does not disappoint. Its common equity tier-one (CET1) ratio rose to 13.5%, up from 13.3% in the previous quarter. That gives it a solid cushion to handle unexpected losses, invest in growth opportunities, and continue paying its dividend even in leaner times.
Value and income
Speaking of dividends, CIBC currently offers a yield of 4.18%, which is higher than many of its large-cap peers. It pays an annual dividend of $3.88 per share. Even better, CIBC has a long track record of dividend increases, reflecting both financial strength and a shareholder-friendly approach. It didn’t cut its dividend during the pandemic and has continued to grow it as earnings recovered.
Another factor working in CIBC’s favour is the Bank of Canada’s evolving stance on interest rates. While rate cuts may be coming later in 2025, most of the pressure from rate hikes appears to be behind us. That’s good news for banks, which struggled last year with margin pressure and cautious lending. If the economy stabilizes and consumer confidence improves, CIBC could benefit from an uptick in mortgage lending, credit card activity, and business loans.
Bottom line
Analysts seem to agree that CIBC is on the right track. The average 12-month price target currently sits around $96, with estimates ranging from $88 to $108. That suggests modest upside in the short term, but again, the real appeal here is not a quick gain. It’s decades of reliable income and slow, steady capital growth.
CIBC is the kind of stock you can buy and not worry about for years. It offers a combination of income, stability, and upside that’s rare in today’s market. And with shares still below recent highs, it may be the perfect moment to buy before the next leg up. For anyone looking to build long-term wealth with less stress, CIBC deserves a serious spot on the watchlist, or better yet, in the portfolio.
