Is CIBC Stock Still a Good Buy After Its Big Rebound?

Is CIBC Stock Still a Good Buy After Its Big Rebound

Is CIBC Stock Still a Good Buy After Its Big Rebound?

Alright, let’s talk about CIBC stock. If you've been paying attention to the markets, you’ve probably noticed that Canadian Imperial Bank of Commerce (TSX:CM) has been on a major comeback. After a rough stretch in 2022, when rising interest rates put pressure on earnings, the stock hit rock bottom at around $49 in late 2023. But since then? It’s been on fire, climbing nearly 86% to its current price of around $91.20. The big question now is—does it still have room to run, or is it time to look elsewhere?

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CIBC’s recovery has been fueled by strong earnings growth. The bank posted a solid 10% increase in adjusted earnings per share (EPS) for fiscal 2024, and investors have responded positively. On top of that, the bank just raised its dividend by 7.8%, bringing its yield to about 4.3%. That’s a strong sign of confidence from management. But here’s the catch—after such a big rally, CIBC is no longer the bargain it once was. It’s now trading at a higher valuation compared to its historical levels, meaning future gains might not come as easily.

Now, if you're looking for an alternative, Manulife Financial (TSX:MFC) could be worth a look. This insurance giant has also had an impressive run, with its stock up around 55% over the past year. Unlike CIBC, though, Manulife’s valuation still looks reasonable. It’s trading at a price-to-earnings (P/E) ratio of about 11.5, compared to CIBC’s higher valuation after its rebound. Manulife’s dividend yield sits at 3.7%, and the company has a strong track record of dividend growth—averaging nearly 11% per year over the past decade.

So, which stock is the better buy right now? If you’re chasing recent momentum, CIBC has been a great success story, but its rapid climb means the easy money might already be made. Manulife, on the other hand, still looks like a solid long-term play with a good mix of growth and income potential. Either way, patience is key—waiting for a dip could be the smartest move for both stocks.

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