Commonwealth Bank of Australia vs ANZ shares

Looking for a steady stream of passive income from ASX bank shares? Commonwealth Bank of Australia (ASX: CBA) and ANZ Group Holdings Ltd (ASX: ANZ) are two of Australia’s banking heavyweights, but they aren’t identical when it comes to dividend income, value, or recent momentum. Here’s my take on which could come out on top for investors chasing reliable returns and regular dividends.

The case for Commonwealth Bank of Australia

Commonwealth Bank of Australia, or CommBank, is a true giant in Australian banking. It’s not only the largest of the big four by market capitalisation, but also one of the most recognisable brands in the country. CBA’s operations stretch beyond Australia, with a presence in New Zealand, the UK, the US, as well as several Asian markets. The company’s product suite covers everything from day-to-day banking through to superannuation, insurance, and wealth management offerings.

A couple of numbers really stand out:

• As of the latest data, CBA’s market cap sits at a whopping $253.56 billion, making it one of the ASX’s biggest blue-chips.
• It boasts a fully franked dividend yield of 3.35%. Every dollar you receive from CBA’s $5.05 per share dividend can be boosted by franking credits, making it an appealing income stock, especially for those who can make use of the credits.
• The shares trade on a price-to-earnings (P/E) ratio of 23.14. By big bank standards, that’s at the higher end, but CBA does have a reputation for quality and steady profits.

The company’s long-term dividend history is a feature, with consistent, fully franked payouts stretching back decades.

The case for ANZ

ANZ is no minnow itself – it’s a banking powerhouse spanning Australia, New Zealand, and about 30 other markets. Like CBA, ANZ caters to a huge base of retail, business, and institutional customers, and its international focus means it’s well diversified for an Australian bank.

Here are the highlights I notice:

• ANZ currently offers a market capitalisation of $115.90 billion, making it a significant player, though not in CBA’s league on pure size.
• Its dividend yield is a healthy 4.39%, notably higher than CBA’s. However, recent dividends have only been 75% franked, so the after-tax benefits for certain investors may be less than a fully franked rival.
• ANZ shares change hands at a P/E ratio of 19.18, which is lower than CBA’s. This could appeal to bargain-hunters or income investors keen on getting more yield for each dollar invested.

While ANZ’s trailing dividend is lower than pre-pandemic years and its franking has varied, it remains a popular option for dividend-focused portfolios.

Valuation comparison

Given both sit within the big four banks, it makes sense to hold them up side-by-side. Here are the main numbers at a glance:

	Commonwealth Bank	ANZ
Market Cap	$253.56 billion	$115.90 billion
P/E Ratio	23.14	19.18
Dividend Yield	3.35% (100% franking)	4.39% (75% franking)
Earnings Per Share	6.517	1.973
Dividend Per Share	$5.05	$1.66

Note: Franking levels for ANZ have recently shifted between 56% and 100%, with the most recent payout at 75%.

Also, ANZ’s reported P/E ratio and EPS figure may reflect different earnings measures, so don’t expect those numbers to tally up precisely for valuation comparisons.

Recent share price performance

Comparing recent share price action up to 25 September 2026:

• Commonwealth Bank closed at $150.83 per share as of 25 September 2026, a modest rebound from its recent soft patch, though it’s down -2.92% year-to-date.
• ANZ closed at $37.84 per share on 25 September 2026, having logged a strong year-to-date gain of 6.41%.

Which is the better buy?

For passive income, my nod goes to ANZ. The headline dividend yield is higher at 4.39%, and it comes at a lower P/E compared to Commonwealth Bank. While CBA’s dividends are 100% franked (a huge plus for maximising after-tax returns, especially for retirees or those on lower tax rates), ANZ’s yield advantage is big enough to matter, even with only 75% franking on the latest payout.

ANZ has also shown better share price momentum this year, adding to its appeal for income-focused investors who care about capital preservation or mild growth on top of regular payments.

CBA still has a lot going for it – size, brand, consistency and the comfort of fully franked dividends. But given ANZ’s relatively strong yield and value stats, I’d lean toward ANZ as my pick right now for those seeking the best blend of dividend income and reasonable valuation in the banking sector.

The post Commonwealth Bank vs ANZ: Which is better for passive income? appeared first on The Motley Fool Australia.

More reading

• Sell alert! Expert calls time on Corporate Travel and CBA shares
• ASX 200 holds steady as investors brace for a big afternoon
• 3 ASX shares to sell now according to experts
• Should I buy CBA shares in October?
• Buy, hold, sell: CBA, BHP, CSL shares

Motley Fool contributor Laura Stewart 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. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial draft. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

There’s a wide variety of exchange-traded funds (ETFs) out there that investors can choose. The Vanguard Australian Shares Index ETF (ASX: VAS) is the most popular ASX-listed ETF, and for good reason, in my opinion.

When I say it’s the most popular, I’m talking about how much money is currently invested in the ETF.

At the end of August 2026, $26.9 billion was invested in the VAS ETF, a significant sum that has grown substantially over the last few years as more investors allocate money to ETFs.

Easy way to invest in the ASX 300

ETF investing has made it very easy for everyday Australians to gain access to the stock market without needing an advanced understanding of shares to gain access to the market average return.

You don’t need to make gigantic returns to see pleasing financial results thanks to the power of compounding. If an investment delivers an 8% return per year, it will double in value in approximately nine years.

Investing in the VAS ETF gives investors exposure to the S&P/ASX 300 Index (ASX: XKO), an index of 300 of the largest and most impressive ASX shares.

The biggest businesses get the largest allocation in the portfolio. For the Vanguard Australian Shares Index ETF, the largest 10 holdings represent 47.5% of the total ETF. Those 10 holdings are:

• BHP Group Ltd (ASX: BHP)
• Commonwealth Bank of Australia (ASX: CBA)
• National Australia Bank Ltd (ASX: NAB)
• Westpac Banking Corp (ASX: WBC)
• ANZ Group Holdings Ltd (ASX: ANZ)
• Wesfarmers Ltd (ASX: WES)
• Macquarie Group Ltd (ASX: MQG)
• CSL Ltd (ASX: CSL)
• Rio Tinto Ltd (ASX: RIO)
• Woodside Energy Group Ltd (ASX: WDS)

Another underrated aspect of investing in the VAS ETF (and others like it) is that the portfolio regularly updates. We don’t need to think about which stocks to buy and sell – the ETF does that for us and simply holds the names that correspond with where they fit in the index.

If a current holding suffers, it will drop down the holding list and play a smaller part in the ETF’s future returns. If there’s a newcomer that is soaring, it will play a bigger part in the ETF’s holdings as time goes on.

Passive income

One advantage the ASX share market offers, compared with many other share markets, is the scale of passive income it provides.

The ASX 300 has a pleasingly high dividend yield thanks to the fact that the largest businesses have a high dividend payout ratio and a relatively low price/earnings (P/E) ratio compared to other sectors like technology and healthcare.

According to Vanguard, at the end of August, the VAS ETF had a dividend yield of 3.1%, excluding franking credits. Compared to most share markets, that’s a solid level of dividend income.

It’s a good idea to re-invest dividends for long-term compounding, but investors can also enjoy the passive income payments for their life spending.

Low costs

One of the best reasons to invest in the VAS ETF is the very cheap management costs. The lower the fees, the more of the net returns stay in the hands of the investor.

According to Vanguard, the VAS ETF has an annual management fee of just 0.07%. That’s extremely low and means we can virtually match the ASX 300 return.

Of course, it’s important to note that the VAS ETF does provide a lot of exposure to the largest holdings, so it could be a good idea to balance with other investments.

For example, an investor could utilise the VanEck Australian Equal Weight ETF (ASX: MVW) or pick market-beating individual ASX stocks to boost their portfolio’s overall return.

The post 3 reasons why the Vanguard Australian Shares Index ETF (VAS) is a solid buy appeared first on The Motley Fool Australia.

More reading

• How much is needed in superannuation to target a $10,000 monthly passive income?
• Own US ETFs like IVV or NDQ? Here’s why your dividends are so low
• 10 top ASX ETFs to watch in 2027
• How many VAS ETF shares do I need to buy for $10,000 per year of passive income?
• Own VAS, VHY, VGS, or other Vanguard ETFs? Here’s your next dividend

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Macquarie Group, and Wesfarmers. The Motley Fool Australia has recommended BHP Group, CSL, Macquarie Group, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The analysts at Barrenjoey are tipping significant upside for Navigator Global Investments Ltd (ASX: NGI) shares following the company’s sale of its stake in Invictus Capital.

Strong return on investment

Earlier this week, Navigator said New York Life Investment Management would acquire a 60% stake in Invictus Capital Partners from Navigator and other shareholders, with the remaining interest to be purchased in 2031.

Navigator said the deal delivered it material upfront proceeds of US$40 million to US$43 million, with a potential earn-out of up to US$32 million in 2030.

An additional consideration would be determined by Invictus’ future business growth, Navigator added.

The company said the transaction implied a materially higher valuation for Invictus compared to its initial investment in 2022.

Navigator added:

For NGI, the Transaction represents a partial realisation at an attractive valuation, while retaining meaningful exposure to Invictus’ ongoing growth and performance over the multi-year period to 2030 through retained interests, existing carried interest and fund investments, and potential future consideration. The Initial Closing is expected to occur in the first quarter of 2027, subject to customary closing conditions and regulatory approvals. It is anticipated to deliver a significant return on NGI’s invested capital, with value realised through upfront proceeds at the Initial Closing, potential earn-out consideration and additional consideration at the Deferred Closing in 2031.

Navigator Chief Investment Officer Ross Zachary said the deal “serves as an example of how NGI’s partnership model can create value for all stakeholders of alternative investment management firms”.

Navigator added:

NGI first partnered with Invictus in August 2022, with total consideration of approximately US$115 million paid over three years. Since then, Invictus has more than tripled gross assets, generating strong outcomes for its investors and extending its leadership position in the U.S. residential mortgage credit market. The results of the partnership, including distributions received by NGI and the growth in the value of NGI’s interests before consideration of the Transaction, have exceeded NGI’s return targets and generated an attractive return for shareholders.

Analysts like the look of the deal

Barrenjoey analysts said in a note to clients that the deal highlights that the price for one of Navigator’s private market firms was well above the valuation it is trading on.

They added:

We estimate a PE for the sale in the high teens, perhaps into the 20s based on management fee-only profits.

Barrenjoey has a price target of $4.20 for Navigator shares, compared with the current $2.43.

Macquarie also issued a new research note on Navigator following the announcement, with a price target of $3.24.

Navigator is valued at $1.51 billion.

The post Barrenjoey tips this ASX financial stock to rise 73% appeared first on The Motley Fool Australia.

More reading

• This ASX biotech could rise almost 50%, Morgans says
• Why are Northern Star shares rocketing 8% on Wednesday?
• Commonwealth Bank vs ANZ: Which is better for passive income?
• 3 reasons why the Vanguard Australian Shares Index ETF (VAS) is a solid buy
• Why is the DroneShield share price surging 9% on Wednesday?

Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.