Sometimes beating the market looks like artificial intelligence (AI), gold, or some company promising to reinvent civilization before lunch.
Other times, it looks like a bank.
The S&P/TSX Composite Index has delivered a total return of about 14% so far in 2026 through September 22. That’s already a strong year. Yet one decidedly ordinary Canadian business has returned roughly 31% over the same period.
Source: Getty Images
Boring can work
A boring business can still produce exciting returns when earnings grow faster than investors expect. Banks make money from the spread between what they pay for deposits and charge borrowers, along with fees from wealth management, credit cards, commercial banking, and capital markets. When those businesses grow while credit losses remain manageable, profits can climb surprisingly quickly.
That’s especially useful for long-term investors. Rather than betting on one new product succeeding, shareholders own a collection of businesses already serving millions of customers. That brings me to Canadian Imperial Bank of Commerce (TSX: CM).
CM
CIBC provides personal and commercial banking, wealth management, and capital-markets services across Canada and the United States. Its shares recently traded at $161.65. Including dividends, CIBC has returned roughly 31% so far this year, more than twice the TSX’s approximately 14% return.
The business has been keeping up. Third-quarter adjusted earnings per share (EPS) climbed 26% year over year to $2.73. Meanwhile, net interest margin excluding trading rose to 2.07% from 1.94% a year earlier. That’s essentially the spread CIBC earns on interest-producing assets, so even a small improvement can matter when billions of dollars are involved. Canadian personal and business banking also remains a major engine, with quarterly net income rising 17%.
Still paying
CIBC currently pays $1.07 per share quarterly, or $4.28 annually. At $161.65, that’s a yield of roughly 2.6%. CIBC also says it hasn’t missed a regular dividend since its first payment in 1868. The starting yield isn’t enormous, particularly compared with some Canadian dividend stocks. Yet income becomes considerably more useful when the business underneath it keeps growing.
CIBC’s Common Equity Tier 1 (CET1) ratio, a key measure of a bank’s capital cushion, was 13.4% at the end of the quarter. That’s important when Canadians are still dealing with elevated borrowing costs and mortgage renewals. For investors building around Canadian blue-chip stocks, boring and well-capitalized isn’t a terrible combination.
Considerations
The obvious problem is that everyone has started noticing. At $161.65, CIBC trades around 15.5 times trailing earnings and sits only about 6% below its 52-week high. Investors aren’t getting the bargain that existed before this year’s run.
Credit also deserves watching. CIBC recorded $564 million in provisions for credit losses during the third quarter, while provisions on impaired loans increased in several Canadian businesses. A weaker economy, higher unemployment, or stressed borrowers could put more pressure on earnings. After a roughly 31% total return this year, expectations are certainly higher.
Bottom line
Outperforming the TSX doesn’t always require finding the next technological revolution. Sometimes a bank grows earnings, improves margins, pays its dividend, and lets compounding handle the theatrics.
I wouldn’t chase CIBC after every strong day. Yet if a pullback gives long-term investors a better entry point, this boring outperformer would remain firmly on my buy list.
Sometimes beating the market looks like artificial intelligence (AI), gold, or some company promising to reinvent civilization before lunch.
Other times, it looks like a bank.
The S&P/TSX Composite Index has delivered a total return of about 14% so far in 2026 through September 22. That’s already a strong year. Yet one decidedly ordinary Canadian business has returned roughly 31% over the same period.
Source: Getty Images
Boring can work
A boring business can still produce exciting returns when earnings grow faster than investors expect. Banks make money from the spread between what they pay for deposits and charge borrowers, along with fees from wealth management, credit cards, commercial banking, and capital markets. When those businesses grow while credit losses remain manageable, profits can climb surprisingly quickly.
That’s especially useful for long-term investors. Rather than betting on one new product succeeding, shareholders own a collection of businesses already serving millions of customers. That brings me to Canadian Imperial Bank of Commerce (TSX: CM).
CM
CIBC provides personal and commercial banking, wealth management, and capital-markets services across Canada and the United States. Its shares recently traded at $161.65. Including dividends, CIBC has returned roughly 31% so far this year, more than twice the TSX’s approximately 14% return.
The business has been keeping up. Third-quarter adjusted earnings per share (EPS) climbed 26% year over year to $2.73. Meanwhile, net interest margin excluding trading rose to 2.07% from 1.94% a year earlier. That’s essentially the spread CIBC earns on interest-producing assets, so even a small improvement can matter when billions of dollars are involved. Canadian personal and business banking also remains a major engine, with quarterly net income rising 17%.
Still paying
CIBC currently pays $1.07 per share quarterly, or $4.28 annually. At $161.65, that’s a yield of roughly 2.6%. CIBC also says it hasn’t missed a regular dividend since its first payment in 1868. The starting yield isn’t enormous, particularly compared with some Canadian dividend stocks. Yet income becomes considerably more useful when the business underneath it keeps growing.
CIBC’s Common Equity Tier 1 (CET1) ratio, a key measure of a bank’s capital cushion, was 13.4% at the end of the quarter. That’s important when Canadians are still dealing with elevated borrowing costs and mortgage renewals. For investors building around Canadian blue-chip stocks, boring and well-capitalized isn’t a terrible combination.
Considerations
The obvious problem is that everyone has started noticing. At $161.65, CIBC trades around 15.5 times trailing earnings and sits only about 6% below its 52-week high. Investors aren’t getting the bargain that existed before this year’s run.
Credit also deserves watching. CIBC recorded $564 million in provisions for credit losses during the third quarter, while provisions on impaired loans increased in several Canadian businesses. A weaker economy, higher unemployment, or stressed borrowers could put more pressure on earnings. After a roughly 31% total return this year, expectations are certainly higher.
Bottom line
Outperforming the TSX doesn’t always require finding the next technological revolution. Sometimes a bank grows earnings, improves margins, pays its dividend, and lets compounding handle the theatrics.
I wouldn’t chase CIBC after every strong day. Yet if a pullback gives long-term investors a better entry point, this boring outperformer would remain firmly on my buy list.
