Many Canadians are feeling nervous about their finances this year, and it’s not just a passing mood. With all this uncertainty, it makes sense that they are searching for reliable, long-term income streams that can help ease the pressure. One of the most dependable ways to do that is through dividend-paying stocks. Canadian Imperial Bank of Commerce (TSX:CM) is a great example of a dividend giant that delivers consistent payouts. The best part? You can calculate exactly how many shares you’d need to hit your income goals, like earning $5,000 a year in dividends.
The stock
CIBC is one of Canada’s Big Five banks and has a long history of rewarding shareholders. Its shares are currently trading around $93.70, and the dividend stock offers a forward dividend yield of approximately 4.2%. That translates to an annual dividend of $3.88 per share. With that payout, you can easily figure out how much you would need to invest in order to earn $5,000 per year.
In fact, right now, you could certainly create $5,000 in annual dividend income. Though it would be a sizeable amount. As you can see, it would take almost $121,000 to reach $5,000 in annual income. Yet it’s the kind of investment that can deliver reliable, tax-free income year after year if held inside a Tax-Free Savings Account (TFSA).
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| CM | $93.69 | 1,289 | $3.88 | $5,000 | Quarterly | $120,822 |
Worth the price?
Before you dive in, is it worth it? Let’s look at earnings. CIBC recently released its second-quarter earnings for the period ending April 30, 2025, and the numbers were strong. The dividend stock reported revenue of $7 billion, beating expectations and showing growth across several segments. Adjusted net income came in at $2 billion, up 17% from the same quarter last year.
Adjusted earnings per share (EPS) were $2.05, supported by strong performance in both personal and commercial banking. The bank also improved its return on equity to 13.9% and maintained a solid common equity Tier 1 ratio of 13.4%. These figures suggest that CIBC remains financially healthy, which is good news for anyone relying on its dividend income.
A strong payout history
Another reason to feel confident about CIBC as an income stock is its track record of maintaining and growing its dividend. The dividend stock has a sustainable payout ratio near 47%, meaning it uses less than half its earnings to fund dividends and keeps the rest to reinvest in growth. That gives it room to keep paying dividends even if earnings dip during a rough patch. With ongoing investments in digital banking and a strong presence across Canada, CIBC appears well-positioned to navigate economic ups and downs.
Of course, putting over $120,000 into one dividend stock isn’t right for everyone. It’s important to consider risk tolerance and whether you want to diversify across sectors or stick with one reliable income generator. There’s always the option of building up to that amount over time. However, for those looking to build a dependable passive income stream, CIBC has a lot going for it. Not only is it a household name with deep Canadian roots, but it also offers dividends that can be timed well for reinvestment or regular spending.
Bottom line
In an economy in which people are more concerned than ever about inflation, recession, and job stability, it’s understandable to seek out investments that feel solid. A dividend stock like CIBC doesn’t just provide a sense of stability. It delivers real, consistent cash flow that can help you feel more in control of your financial future. If your goal is to earn $5,000 in annual dividends, now you know exactly what it takes. And for many Canadians, that kind of clarity and peace of mind is priceless.
