As the Canadian market navigates a complex economic landscape, investors are increasingly focused on stable income streams amid fluctuating indices and evolving trends. In this environment, dividend stocks stand out as attractive options for those seeking reliable returns, offering both potential income and a measure of stability.
Overview: Canadian Imperial Bank of Commerce is a diversified financial institution offering a range of financial products and services to personal, business, public sector, and institutional clients across Canada, the United States, and internationally with a market cap of approximately CA$87.21 billion.
Operations: Canadian Imperial Bank of Commerce generates revenue through several segments, including Canadian Personal and Business Banking (CA$9.04 billion), Capital Markets and Direct Financial Services (CA$5.69 billion), U.S. Commercial Banking and Wealth Management (CA$2.25 billion), and Canadian Commercial Banking and Wealth Management (CA$5.61 billion).
Dividend Yield: 4.2%
Canadian Imperial Bank of Commerce (CIBC) demonstrates a stable dividend profile, with dividends well-covered by earnings due to a payout ratio around 49.4%. Recent earnings growth, with net income rising to C$7.12 billion for the year, supports its dividend sustainability. The bank's recent C$0.07 increase in quarterly dividends reflects its commitment to returning value to shareholders. However, its dividend yield of 4.23% is lower than top-tier Canadian payers, and insider selling may warrant caution for some investors.
Overview: Evertz Technologies Limited designs, manufactures, and distributes video and audio infrastructure solutions for production, post-production, broadcast, and telecommunications markets globally with a market cap of CA$921.88 million.
Operations: Evertz Technologies generates revenue primarily from the Television Broadcast Equipment Market, amounting to CA$494.95 million.
Dividend Yield: 6.5%
Evertz Technologies offers a high dividend yield of 6.55%, placing it among Canada's top 25% dividend payers, but its sustainability is questionable given the payout ratio of 103.1%. Recent earnings have declined, with net income dropping to C$15.8 million in Q2 2024 from C$22.09 million a year prior, impacting dividend coverage by earnings despite cash flow support (85.2% cash payout ratio). A recent share repurchase program may affect future capital allocation strategies.
Overview: Finning International Inc. is involved in the sale, service, and rental of heavy equipment, engines, and related products across Canada, Chile, Bolivia, the United Kingdom, Argentina, Ireland, and other international markets with a market cap of CA$5.02 billion.
Operations: Finning International Inc.'s revenue from the sale, service, and rental of heavy equipment, engines, and related products is CA$10.99 billion.
Dividend Yield: 3%
Finning International's dividend is sustainable, supported by a payout ratio of 33% and a cash payout ratio of 21.6%. Despite a high debt level, its dividends have been reliable and stable over the past decade. The company recently affirmed its quarterly dividend at C$0.275 per share, payable in December 2024. While the yield is modest at 3.01%, it trades at good value compared to peers, with analysts expecting stock price appreciation. Recent buybacks indicate strategic capital management amidst growing revenues but declining net income in Q3 2024.
Got skin in the game with these stocks? Elevate how you manage them by using Simply Wall St's portfolio, where intuitive tools await to help optimize your investment outcomes.
Unlock the power of informed investing with Simply Wall St, your free guide to navigating stock markets worldwide.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include TSX:CM TSX:ET and TSX:FTT.
