TD & CIBC (TSX:CM) report Q4 profit, hike dividends: Buy call?

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 TD & CIBC (TSX:CM) report Q4 profit, hike dividends: Buy call?
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Highlights 

  • Toronto-Dominion Bank saw its adjusted net income grow by 30 per cent year-over-year (YoY) to C$ 3.9 billion in Q4 FY2021.
  • A bank, considered as one of the big banks in Canada, saw its net income grow by 42 per in the fourth quarter of FY2021.
  • A bank stock listed below delivered a return of more than 36 per cent in the past year.

After the Office of the Superintendent of Financial Institutions (OSFI) approved share buybacks and dividend hikes, Canadian banks have embarked on the much-awaited journey to deliver rewards to their shareholders.

So, let us look at two of the big five Canadian banks that released their fourth quarter results for 2021 on Thursday, December 2, while hiking their dividend payouts significantly.

Also read: Which Canadian bank stocks to buy as dividends go up?

1.    Toronto -Dominion Bank (TSX: TD)

Toronto-Dominion Bank, which holds a market capitalization of C$ 176 billion, saw its adjusted net income grow by 30 per cent year-over-year (YoY) to C$ 3.9 billion in Q4 FY2021.

In contrast, the bank reported a YoY decline of 26 per cent in its net income of C$ 3.8 billion in latest quarter. Its diluted earnings per share was C$ 2.04 in the fourth quarter of fiscal 2021 compared to C$ 2.80 per share in the same quarter a year ago.

Toronto-Dominion Bank also hiked its dividend by 13 per cent (10 cents) from the earlier payout of C$ 0.79 apiece. The bank is scheduled to pay a quarterly dividend of C$ 0.89 apiece on January 31, against an ex-dividend date of January 7.

The bank also announced its intentions to repurchase up to 50 million shares.

 Toronto-Dominion Bank (TSX:TD)’s financial performance in Q4 FY2021

 Image source: © 2021 Kalkine Media Inc 

Data source: Toronto-Dominion Bank

Stocks of Toronto-Dominion Bank clocked a 52-week high of C$ 96.75 on Thursday, December 2. Its stock closed at C$ 96.50 apiece this day, up by nearly five per cent.

The bank stock also swelled by almost 17 per cent in the last three months and delivered a return of more than 36 per cent in the past year.

2.    Canadian Imperial Bank of Commerce (TSX: CM)

Canadian Imperial Bank of Commerce, aka CIBC, saw its net income grow by 42 per cent YoY to C$ 1.4 billion in the fourth quarter of fiscal 2021. Its adjusted net income increased by 23 per cent YoY to C$ 1.6 billion in the latest quarter.

The CIBC posted a YoY surge of 40 per cent in its diluted earnings of C$ 3.07 per share in Q4 FY2021. The bank also announced its intention to purchase up to 10 million shares.

The CIBC also increased its quarterly dividend to C$ 1.61 per share, which was earlier C$ 1.46 per share. It is scheduled to pay this dividend on January 28, 2022, against an ex-dividend date of December 28.

The CIBC’s stock soared by more than 26 per cent in 2021. Its stock clocked at a 52-week high of C$ 152.87 on November 4.

After hitting a day high of C$ 140.84, the bank stock closed at C$ 137.28 apiece on December 2.

Also read: How the omicron variant can impact Canadian stock markets

Bottom line

Banks play crucial role in balancing the financial infrastructure of a country.

As this importance can strengthen their business model, bank stocks can be a resilient investment options for investors who are looking for safe and stable returns in the long term along with regular dividend income.

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