The Commonwealth Bank of Australia (ASX: CBA) share price usually offers investors a decent dividend yield. But is it good enough to buy it today?
Commonwealth Bank has delivered plenty of growth for shareholders over the years, though the CBA share price has gone backwards over the past year.
When the valuation goes down, the dividend yield increases, so this is helpful for potential buyers wanting passive income.
How big could the Commonwealth Bank dividend yield be?
I’m going to look at forecasts for what size the dividend from the ASX bank share could be in FY27, which is the next financial year.
The forecast I’m going to look at is on Commsec, though CBA itself didn’t come out with this projection.
This projection suggests the ASX bank share could pay a FY27 dividend per share of $5.45, which would be 5.8% higher than the projected amount for FY26.
If CBA does pay that amount in FY27, it’d be a dividend yield of 3.3% excluding the franking credits and 4.7% including the franking credits.
Is the CBA share price attractive right now?
The current term deposit rate is more attractive than the CBA dividend yield, though the bank has the potential to increase its payout over time because of its ability to grow profits.
Plenty of ASX dividend shares have larger dividend yield than CBA. To buy CBA today, I’d need to have belief that it can grow its loan book and profit at a pace that can outperform market expectations over the next few years, which isn’t how I’d describe the bank. The FY26 third-quarter result was not strong enough, in my opinion, to convince me the bank can deliver strong growth, particularly after the Australian tax changes that may hurt overall loan demand.
Other large ASX shares like Telstra Group Ltd (ASX: TLS), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) have a larger dividend yield than Commonwealth Bank.
Plenty of listed investment companies (LICs) also have a larger dividend yield than CBA such as Australian Foundation Investment Co Ltd (ASX: AFI), WAM Leaders Ltd (ASX: WLE) and Future Generation Global Ltd (ASX: FGG) also have a much more appealing dividend yield than CBA.
So, while CBA is a great bank, it’s not one of the first ASX dividend shares I’d buy today for passive income.
