The CBA (ASX:CBA) share price is now trading on a 3.46% fully-franked dividend yield

Investors will be eyeing the company’s upcoming dividend
The post The CBA (ASX:CBA) share price is now trading on a 3.46% fully-franked dividend yield appeared first on The Motley Fool Australia. –

The Commonwealth Bank of Australia (ASX: CBA) share price has enjoyed robust returns over the past year.

In fact, investors were treated with the company’s full year results on 11 August, underlining growth across key metrics.

At Wednesday’s market close, CBA shares finished the day up 0.88% to $101.

What’s happened to CBA recently?

Investors have been bidding on the CBA share price in 2021 as the company continues to impress the market.

According to its latest scorecard, CBA achieved almost a 20% increase of statutory net profit after tax to $8,843 million. An improvement in Australia’s economic conditions and outlook resulted in lower loan impairment expenses of $554 million, down 78% on FY20.

In addition, net interest margin came to 2.03%, down 4 basis points due to higher liquid assets. The impact of a low-rate environment had been largely offset by management actions, lower wholesale funding costs and favourable funding mix.

It’s worth noting that CBA is conducting a $6 billion off-market share buy-back to reduce surplus capital and increase shareholder value. The capital management program will see about a 3.5% reduction of its total shares on the registry.

Basically, this means that when CBA buys back its shares, the number of shares on its registry will decrease. With a lesser amount, this effectively increases the value of each share as the revenue and profits remain the same.

Traditionally, when this occurs, a company’s share price tends to rise over time.

CBA shares are just 7.3% off their all-time high of $109.03, which was reached on the day the company reported in August.

How much is CBA paying in dividends?

CBA is scheduled to pay a fully-franked dividend of $2 per share to eligible shareholders on 29 September. Coupled with the interim dividend of $1.50, the full year dividend for FY21 is $3.50 per share. This represents a 17% increase on FY20’s dividend, and a payout ratio of 71% on the bank’s cash earnings.

When factoring in the current CBA share price along with its full year dividend, CBA’s dividend yield rises to 3.46%.

About the CBA share price

In 2021, the CBA share price gained around 20% in value for investors. However, when looking at this time last year, its shares are up roughly 50%, highlighting significant returns for a blue-chip company.

On valuation grounds, CBA is the biggest company on the ASX with a market capitalisation of approximately $179.1 billion.

The post The CBA (ASX:CBA) share price is now trading on a 3.46% fully-franked dividend yield appeared first on The Motley Fool Australia.

Should you invest $1,000 in CBA right now?

Before you consider CBA, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and CBA wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Top broker picks best ASX 200 bank shares to buy coming out of reporting season

How does the NAB dividend compare to its sector?

CBA (ASX:CBA) just failed the government’s superannuation test
Is the CBA (ASX:CBA) share buyback a sign of limited growth potential?
Australia’s rising delta recession risk could hit these ASX 200 shares badly

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!