Commonwealth Bank of Australia (ASX: CBA) shares have pulled back from their highs, but they still trade at a sizeable premium to the other major banks.

At around $163.56 at the time of writing, CBA shares are above their 52-week low of $146.97 but still well below their 52-week high of $192.

That creates an interesting setup. The banking sector is dealing with a difficult backdrop, including higher interest rates and proposed changes to negative gearing weighing on the housing market. But I think there are still good reasons to buy CBA shares today.

Quality counts in a tougher banking market

The first reason is quality. When conditions become more uncertain, I think investors have a strong reason to focus on the highest-quality bank in the sector. CBA has long held a powerful position in Australian banking, helped by its huge customer base, strong deposit franchise, digital strength, and trusted brand.

Those advantages can be especially useful when the operating environment is harder.

Higher interest rates can put pressure on borrowers. Housing market sentiment can shift. Competition for deposits and mortgages can affect margins. Credit quality also needs watching when households and businesses are under pressure.

In that environment, I think CBA’s scale and customer relationships matter.

The bank has a broad presence across home lending, deposits, business banking, payments, cards, apps, and everyday financial services. It is deeply embedded in the financial lives of many Australians, and that gives it a level of resilience that is hard to replicate.

CBA shares are rarely cheap. But I think the premium reflects a business that investors trust to navigate more difficult periods better than most.

The dividend still has appeal

The second reason is income. CBA shares may not offer the highest dividend yield among the major banks, but the dividend still looks attractive, particularly because it is expected to be fully franked.

According to CommSec, consensus estimates point to dividends per share of $5.10 in FY26 and $5.15 in FY27.

Based on the current share price of around $163.56, that implies forward dividend yields of approximately 3.1% in both years.

For investors who can use franking credits, the grossed-up income picture could look more appealing.

I also think investors should consider the total return potential. A bank share does not need to have the highest yield on the ASX to be worthwhile. If CBA can keep paying reliable dividends while also delivering capital growth over time, the overall return can still be attractive.

That combination is why I think CBA remains such a popular long-term holding.

Earnings support the premium

The third reason is the earnings base. CommSec consensus estimates suggest CBA could generate earnings per share of $6.54 in FY26 and $6.72 in FY27.

At the current share price, that puts the bank on a price-to-earnings (P/E) ratio of about 25 times FY26 earnings and 24 times FY27 earnings.

That is a premium multiple for a bank. But CBA is also the bank with the strongest market reputation, and I think investors have historically been willing to pay more for its quality, consistency, and digital leadership.

The key question is whether CBA can keep justifying that premium.

I think it can. The bank’s technology investment, customer engagement, balance sheet strength, and ability to generate substantial profits all support the case. It may not deliver explosive growth, but it does not need to. A high-quality bank with strong dividends, disciplined lending, and a trusted position in the economy can still create value for shareholders over time.

Foolish Takeaway

CBA shares are not priced like a bargain-bank stock, and that is unlikely to surprise anyone who follows the sector.

But I do not think the investment case rests on the bank suddenly becoming cheap. It rests on the strength of the franchise, the role CBA plays in Australian financial life, and the likelihood that patient investors can still be rewarded through a mix of earnings, dividends, and time.

The sector faces uncertainty, especially around borrowers, housing sentiment, and competition. Even so, for long-term investors looking for exposure to Australian banking, I think CBA remains a share worth considering.

The post 3 big reasons to buy CBA shares appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has positions in Commonwealth Bank Of Australia. 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.

CSL Ltd (ASX: CSL) shares have taken a severe hit over the past year. The stock is down around 34% year to date and roughly 52% over the past 12 months at the time of writing.

That kind of drawdown has forced investors to rethink the once-premium growth story, and analyst sentiment has clearly turned more cautious. Let’s break down why.

Three major pillars

CSL is one of the world’s leading biotechnology companies, built on three major pillars. It collects and processes blood plasma through CSL Behring, supplies influenza vaccines through CSL Seqirus, and operates CSL Vifor, which focuses on iron deficiency and nephrology treatments after its major acquisition of Vifor Pharma.

For years, CSL shares were treated as a defensive growth compounder with strong pricing power and resilient demand. That reputation is now being tested as growth slows and integration challenges emerge.

Why CSL shares are under pressure

The sell-off has not come from a single issue. It has built gradually as investors reassess earnings quality, acquisition outcomes, and valuation support.

One of the clearest warning signs has been the downgrade cycle building across FY26 expectations and beyond. Analysts have trimmed revenue and earnings forecasts as they factor in weaker contributions from CSL Vifor and slower growth across parts of the business.

On top of that, CSL has recognised around $5 billion in impairments linked to acquired assets. While these are non-cash charges, they signal that earlier assumptions about the value and performance of those assets may have been too optimistic.

CSL Vifor is proving harder to fix than expected

The real battleground for sentiment is CSL Vifor. The business was supposed to be a strategic growth engine, particularly in nephrology, but it continues to underperform.

Ord Minnett has taken a notably bearish view on CSL shares, arguing the market is still underestimating the scale of the Vifor challenge. The broker explains:

Ord Minnett has reviewed its CSL (CSL) model further with a focus on its Vifor nephrology business that is facing challenges which, in our view, are being underestimated by the broader market. Our estimates for Vifor revenue and operating profit in FY27 are below consensus estimates by 15% and 32%, respectively, while our forecasts for operating profit across the FY27–FY29 horizon are more than 10% below market expectations.

That gap between broker expectations and consensus highlights a simple risk: earnings may still be drifting lower.

Higher interest rates are compressing valuation

The final pressure point is macro-driven. Higher interest rates have hit growth stocks hard, and CSL shares are no exception.

When interest rates rise, future earnings are discounted more heavily. That matters for CSL because a large part of its valuation depends on long-term growth assumptions rather than near-term earnings. As discount rates increase, that long-term value becomes less attractive in present terms.

What next for CSL shares?

CSL is still a global leader in plasma therapies and vaccines, and its core businesses remain highly valuable. However, the market is no longer willing to pay a premium multiple without clearer proof that growth is re-accelerating. That’s why analysts at Peak Asset Management have a sell rating on CSL shares.

Until CSL Vifor stabilises and earnings forecasts stop drifting lower, sentiment is likely to remain cautious. For now, the stock is still working through a reset in expectations, and that process rarely happens quickly.

The post 3 reasons why experts think CSL shares are a sell appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther 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. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Building a balanced portfolio doesn’t have to be complicated. One approach is to combine a reliable dividend payer with a high-quality ASX growth stock.

That way, investors can enjoy a stream of passive income while also benefiting from the potential for long-term capital growth. With that in mind, here are two ASX shares that could be worth considering right now.

Woolworths Group Ltd (ASX: WOW)

When it comes to dependable dividend shares, Woolworths stands out as one of the ASX’s most established blue chip companies.

Woolworths operates Australia’s largest supermarket network and serves millions of customers every week through its supermarkets, online platforms, and complementary retail businesses. While grocery retailing may not be the most exciting industry, the ASX stock offers something many investors value: resilience.

Consumers still need to buy food and household essentials regardless of economic conditions. That defensive characteristic helps Woolworths generate relatively stable earnings and cash flow across market cycles, providing a strong foundation for dividend payments.

The company has also been investing heavily in technology, supply chain improvements, and its digital capabilities. These initiatives should help strengthen its competitive position and support earnings growth over the long term.

While dividend yields can fluctuate, Woolworths has a long history of rewarding shareholders through fully franked dividends. Bell Potter expects Woolworths to pay dividends of 91 cents per share in FY26 and 94 cents in FY27. This translates to forward dividend yields of approximately 2.4% and 2.5%, respectively.

For investors seeking a combination of income and stability, the ASX supermarket stock remains one of the highest-quality dividend stocks on the Australian market.

Pro Medicus Ltd (ASX: PME)

For investors seeking capital growth, Pro Medicus continues to stand out as one of the ASX’s premier growth companies. The $18 billion ASX stock has jumped 35% in the past month, but is still 20% down in 2026.

Pro Medicus develops medical imaging software used by hospitals, healthcare networks, and radiology providers around the world. Its flagship Visage platform allows clinicians to access, analyse, and share medical images quickly and efficiently, helping improve workflow and patient outcomes.

What makes the ASX stock particularly compelling is the strength of its business model. The company generates high-margin recurring revenue, carries no debt, and consistently converts a large portion of its earnings into cash.

Just as importantly, demand for advanced medical imaging technology continues to grow. Healthcare providers are handling increasing volumes of imaging data and are seeking faster, more efficient solutions. Pro Medicus has positioned itself at the centre of this trend.

The company has also built a strong track record of winning major contracts with leading healthcare institutions, particularly in the US. Each new contract expands its customer base and creates opportunities for future growth.

Macquarie has an outperform rating on the ASX healthcare company, with a $221 target, implying a potential gain of 27%. The analyst team at Morgans is a little less bullish, but still has a buy rating and $210 target price on the shares. This points to a 19% upside over the next 12 months.

The post One ASX dividend and one ASX growth stock to buy now appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has recommended Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.