Lowest ASX bank yield: Are CBA shares still worth it?

Friends at an ATM looking sad.

Friends at an ATM looking sad.

Commonwealth Bank of Australia (ASX: CBA) shares have been one of the ASX’s most popular constituents ever since the bank was privatised in the 1900s. Today, CBA is the undisputed king of the pile when it comes to ASX 200 bank shares.

With its market capitalisation of almost $170 billion, only BHP Group Ltd (ASX: BHP) can boast of beating CBA when it comes to Australia’s largest listed company.

But one thing stands out when comparing CBA to its fellow ASX 200 bank shares. And it’s the first metric most ASX investors look at when analysing an ASX bank: the dividend yield.

Right now, CBA shares have a trailing dividend yield of 4.2%. That’s fully franked, of course. This yield stems from CBA’s last two dividend payments, which together came to $2.10 per share.

Now 4.2% is nothing to turn one’s nose up against, of course. But it is decidedly on the smaller end of the ASX financial sector yield curve.

For instance, the next ASX 200 bank on the scale is National Australia Bank Ltd (ASX: NAB). It currently offers a dividend yield of 5.24%. Westpac Banking Corp (ASX: WBC) stands at 5.62%, while ANZ Group Holdings Ltd (ASX: ANZ) is sitting at a meaty 6%.

Outside the big four, things get even more interesting still. Bendigo and Adelaide Bank Ltd (ASX: BEN) currently has a trailing yield of 6.36%. And Bank of Queensland Ltd (ASX: BOQ) is sitting on a whopping 7.31% (although this might be in jeopardy).

All in All, CBA’s yield looks a little diminutive compared to all of its peers.

So with that in mind, should ASX investors even bother with CBA shares right now?

Are small-yield CBA shares still a buy today?

Yesterday, the CBA share price closed at $100.11.

As my Fool colleague Bronwyn comprehensively covered last week, that sits fairly close to what the majority of ASX brokers reckon the shares will be in a year’s time.

ASX broker UBS currently has a neutral rating on the CBA share price, with a 12-month price target of $100. Morgans is even less optimistic, with a target of just $96.11.

So not a lot of enthusiasm for CBA from ASX brokers right now.

In fact, many brokers are recommending investors go with one of CBA’s big four stablemates. UBS is buy-rated on ANZ shares at the moment, with a $25 share price target instead.

Morgans prefers Westpac and has an add rating on those shares, with a share price target of $25.80. Whereas fellow ASX broker Goldman Sachs picks NAB as its favourite, with a buy rating and a $35.42 share price target.

Not too many ASX experts appear to like the CBA share price right now. But only time will tell whose picks prove to be on the money. 

The post Lowest ASX bank yield: Are CBA shares still worth it? appeared first on The Motley Fool Australia.

Where should you invest $1,000 right now? 3 dividend stocks to help beat inflation

This FREE report reveals 3 stocks not only boasting sustainable dividends but that also have strong potential for massive long term returns…

See the 3 stocks
*Returns as of April 3 2023

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);

More reading

Motley Fool contributor Sebastian Bowen has positions in National Australia Bank. 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 positions in and has recommended Bendigo And Adelaide Bank. The Motley Fool Australia has recommended Westpac Banking. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/DgIsUCG

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s