Commonwealth Bank of Australia (ASX: CBA) shares are now trading ex-dividend which partially explains today's 3.4% decline, representing a fall of $3.17 per share.
On Wednesday last week, Commonwealth Bank reported a record cash profit of $4.623 billion, up 8% on the prior year. It matched this with an 8% increase to its already generous dividend yield, promising to pay investors a fully franked $1.98 dividend per share. The dividend will be distributed on 2 April 2015.
Indeed, the bank's fully franked dividend has been one of the primary reasons behind the market's utter obsession with the stock. In a low interest rate environment, investors from around the world have flocked to the bank stock, pushing it to fresh all-time highs recently.
As appealing as its dividend is however, the stock itself is by no means a bargain and investors should look towards other high-yielding alternatives for superior investment returns.
