Should I buy CBA shares for their ‘reliable’ passive income?

Commonwealth Bank of Australia (ASX: CBA) shares are slipping today.

Shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed on Friday trading for $165.02. As we head into the Monday lunch hour, shares are changing hands for $163.09 apiece, down 1.2%.

For some context, the ASX 200 is down 0.2% at this same time.

Taking a half step back, CBA shares have gained 1.3% in 2026 so far, outpacing the 0.2% year to date loss posted by the benchmark index.

Atop that modest share price outperformance, CommBank also paid out a $2.35 fully-franked interim dividend on 30 March.

Adding in the $2.60 final dividend, delivered to stockholders’ bank accounts on 29 September, and CBA stock trades on a fully-franked trailing dividend yield of 3%.

As for the reliability of that passive income, CBA has made two fully-franked dividend payments every year for more than a decade now.

Which brings us back to our headline question.

Are CBA shares a good buy for passive income?

Red Leaf Securities’ John Athanasiou recently analysed the outlook for Australia’s biggest bank stock (courtesy of The Bull).

“CBA remains the highest quality franchise in Australian banking, supported by its dominant deposit base, strong digital ecosystem and industry leading profitability,” he noted.

Athanasiou added, “Earnings remain resilient, but growth is moderating as mortgage competition intensifies and credit expansion normalises.”

At its third-quarter results (Q3 FY 2026), released on 13 May, CBA reported an unaudited cash net profit after tax of around $2.7 billion. That was up 4% from Q2; however, cash profits were down 1% from the first half-year quarterly average.

As for that passive income, Athanasiou said, “Credit quality is stable and dividends remain highly reliable, reinforcing its defensive appeal.”

Connecting the dots, Athanasiou issued a hold recommendation on CBA shares.

He concluded:

However, the key issue is valuation, with the stock trading at a significant premium to domestic and global peers. Much of the quality and stability is already priced in, leaving limited upside without a material macro or earnings surprise to the upside.

How does CommBank’s valuation stack up to rival ASX 200 bank stocks?

The premium commanded by CBA shares has long been an issue for many analysts and fund managers.

CommBank stock currently trades on a price-to-earnings (P/E) ratio of around 26 times.

To put that into some perspective, Westpac Banking Corp (ASX: WBC) shares trade on a P/E ratio of around 18 times; ANZ Group Holdings Ltd (ASX: ANZ) shares trade on a P/E ratio of around 17 times; and National Australia Bank Ltd (ASX: NAB) shares trade on a P/E ratio of around 17 times.

The post Should I buy CBA shares for their ‘reliable’ passive income? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben 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 Scott Phillips.