Insights

The CBA share price has struggled in the last month. Here’s why

Australia’s largest bank hasn’t had an easy time of it lately…
The post The CBA share price has struggled in the last month. Here’s why appeared first on The Motley Fool Australia. –

The S&P/ASX 200 Index (ASX: XJO) has not enjoyed a great month over the past four weeks. As it stands on today’s market moves, the ASX 200 has slipped by around 0.51% compared to this time in August.

But one major ASX 200 constituent has fared worse than the ASX 200 over the past month. That would be the ASX 200’s largest bank (and presently largest company), Commonwealth Bank of Australia (ASX: CBA).

The Commonwealth Bank share price has underperformed the ASX 200 over the past month. While the ASX 200 has gone backwards by around 0.51%, CBA shares have gone from just under $105 a share a month ago to today’s share price (at the time of writing) of $101.83 a share. That’s a slide of around 3%.

So why this struggle for the CBA share price?

Why has the CBA share price underperformed the ASX 200 over the past month?

Well, it’s important to note that ASX bank shares have been a hard-hit sector during the widespread lockdowns of the past few months. As my Fool colleague Kerry discussed last week, the ASX banks may be struggling with slowing housing and credit growth, as well as the potential of customers and businesses struggling to service loans in these difficult times.

After the initial excitement following CBA’s earnings results last month, this could well be a factor in the recent poor run for the CBA share price.

But that brings us to a second possible catalyst for CBA’s poor performance: its recent dividend and share buyback program.

During its FY21 earnings report, CBA announced a well-received final, fully franked dividend of $2 per share, alongside a $6 billion share buyback program. This payout went ex-dividend on 17 August which resulted in a 3% share price drop that day

New owners of CBA at and after this date are not eligible to receive this dividend, so it makes sense that its value leaves Commonwealth Bank’s market capitalisation. CBA closed access to its share buyback offer the day before, on 16 August.

Both of these actions evidently resulted in investors adjusting the CBA share price accordingly. As such, these events are likely a major reason why CBA shares have gone backwards over the past month.

At the current CBA share price, this ASX bank has a market capitalisation of $180 billion, a price-to-earnings (P/E) ratio of 21.67 and a dividend yield of 3.43%.

The post The CBA share price has struggled in the last month. Here’s why appeared first on The Motley Fool Australia.

Should you invest $1,000 in Commonwealth Bank right now?

Before you consider Commonwealth Bank, 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 Commonwealth Bank 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

The Macquarie (ASX:MQG) share price is outperforming the ASX big 4 in the past month
Why the BHP (ASX:BHP) share price is slumping 1% today
ASX 200 midday update: BHP & Fortescue fall, Flight Centre storms higher

Transurban (ASX:TCL) share price could get boost from WestConnex rumour
5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Sebastian Bowen 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!