Shares in Commonwealth Bank of Australia (ASX: CBA) have risen a steady 30c or 0.37% today to be trading at $81.56. They are now sitting just 1.4% below their all-time high.
The bank has played a key role in driving the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) to a fresh six-year high.
Here are three reasons why the stock might have risen today…
1) The Aussie stock market received a welcomed boost overnight as Wall Street climbed higher. The Dow Jones rose 0.4% while the tech-heavy Nasdaq rose 0.7%.
2) Inflationary figures were released by the Australian Bureau of Statistics today which will likely see the Reserve Bank keep interest rates on hold at 2.5%. That's good news for Commonwealth Bank as it will likely boost lending activity and keep bad debt charges lower for longer.
3) With interest rates set to remain low, it is also possible that investors' attraction to the stock's juicy dividend yield has been reinvigorated. Currently the stock yields 4.9%, fully franked, which is far more attractive than the alternative returns from term deposits or bonds.
Buy this dividend stock before CBA
Commonwealth Bank is a high quality company and offers a bumper dividend, but its shares have become wildly overpriced.