Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM) is Canada’s fifth-largest bank in terms of total assets, and I think its stock is a strong buy for three reasons. Let’s take a closer look at these reasons to see if you agree and if you should buy the stock today.

1. Its very strong financial results could support a near-term rally

Earnings play a major role in a stock’s performance in the quarter in which they are released, and on May 26, CIBC announced very strong results for its three- and six-month periods ended on April 30, 2016. Here’s a quick breakdown of 12 of the most notable statistics from the first half of fiscal 2016 compared with the same period in fiscal 2015:

  1. Adjusted net income increased 5.9% to $1.99 billion
  2. Adjusted diluted earnings per share increased 6.7% to $4.95
  3. Total revenue increased 5.3% to $7.22 billion
  4. Net interest income increased 7.6% to $4.14 billion
  5. Non-interest income increased 2.4% to $3.08 billion
  6. Total assets increased 8.9% to $478.14 billion
  7. Total deposits increased 8.1% to $368.71 billion
  8. Total loans and acceptances, net of allowance, increased 9.8% to $303.76 billion
  9. Total assets under administration decreased 0.9% to $1.88 trillion
  10. Total assets under management increased 2.2% to $169.62 billion
  11. Total common shareholders’ equity increased 13.4% to $20.59 billion
  12. Book value per share increased 10.8% to $52.16

2. It’s a great value play

CIBC’s strong earnings results could enable a short-term rally, but its stock is also undervalued, which means a short-term rally could easily turn into a sustained move higher over the long term.

Its stock currently trades at just 10.7 times fiscal 2016’s estimated earnings per share of $9.58 and only 10.3 times fiscal 2017’s estimated earnings per share of $9.91, both of which are inexpensive compared with its trailing 12-month price-to-earnings multiple of 11.3, its five-year average multiple of 11, and the industry average multiple of 13.6.

It also trades at just 1.96 times its book value per share of $52.16, which is a discount compared with its five-year average market-to-book value of 2.1 and the industry average market-to-book value of 2.34.

3. It’s home to one of the market’s best dividends

Dividends amplify your returns over the long term, especially when you reinvest them, and CIBC has one of the best in the market. It pays a quarterly dividend of $1.21 per share, or $4.84 per share annually, which gives its stock a high and safe yield of about 4.7% at today’s levels.

Investors must also make the following four notes about its dividend.

First, CIBC has not missed a regular dividend payment since it began paying a dividend in 1868.

Second, it has raised its dividend for seven consecutive quarters.

Third, the company’s numerous dividend hikes since the start of 2015 have it on pace for 2016 to mark the sixth consecutive year in which it has raised its annual dividend payment.

Fourth, it has a target dividend-payout range of 40-50% of its net earnings, so I think its consistent growth, including its aforementioned 6.7% year-over-year increase to an adjusted $4.95 per share in the first half of fiscal 2016, will allow its streak of quarterly and annual dividend hikes to continue for many years to come.

Is now the time for you to add CIBC to your portfolio?

I think Canadian Imperial Bank of Commerce is a strong buy, so if you agree, take a closer look and consider initiating a position today.

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Fool contributor Joseph Solitro has no position in any stocks mentioned.