How much passive income could I earn buying $5,000 of CBA shares today?

There’s are good reasons passive income investors often hold Commonwealth Bank of Australia (ASX: CBA) shares in their portfolios.

Atop from the potential for share price gains (CBA shares are up 62% over five years), the S&P/ASX 200 Index (ASX: XJO) bank stock has a long history of paying two fully franked dividends per year.

CBA even made two dividend payouts in 2020, despite the COVID-19 stock market madness of that time. And those dividends aren’t included in the share price gains I mentioned above.

With that in mind, how much passive income could I earn if I invested $5,000 in CBA shares today?

Banking on passive income from CBA shares

As CBA just reported its half-year results on Wednesday, we have a better grasp on what kind of dividend payments I might expect from the ASX 200 bank stock in the year ahead.

As for Wednesday’s results, CBA reported a 0.2% year on year increase in operating income, which reached $13.65 billion for the six months.

But with expenses up 4% over the half year, the big bank’s cash net profit after tax (NPAT) slipped 3% to $5.02 billion.

Still, CBA pleased passive income investors with a 2.4% boost to its interim dividend, which came out at $2.15 per share.

CBA shares trade ex-dividend next Wednesday, 21 February. So if I buy shares today (and hold them at close next Tuesday) I’ll be eligible to receive that dividend. I can then expect that payout to land in my bank account on 28 March.

On the back of a strong FY 2023, CBA also paid a final dividend of $2.40 per share on 28 September.

That brings the past 12 months of passive income payouts to $4.55 per share.

At Thursday’s closing price of $114.96 a share, CBA shares trade on a yield (partly trailing, partly pending) of 4.0%, with potential tax benefits from those franking credits.

Getting back to our headline question then, I could buy 43 CBA shares today with my $5,000, leaving me with just over $50 in change.

And I could expect $195.65 in passive income over the coming year from those shares.

Of course, I’ll also be hoping to see a continuation of the long-term trend that’s seen the CBA share price gain 62% over the past five years!

The post How much passive income could I earn buying $5,000 of CBA shares today? appeared first on The Motley Fool Australia.

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More reading

• Why you should sell your CBA shares before it’s too late
• 5 things to watch on the ASX 200 on Thursday
• Everything you need to know about the CBA dividend
• CBA shares tumble 3% on half-year profit decline and margin pain
• CBA share price on watch following $5b cash profit and dividend boost

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.

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