What should you do with your Commonwealth Bank of Australia dividend?

Shareholders of Commonwealth Bank of Australia (ASX: CBA) had plenty of reasons to be concerned in recent weeks, but today, they have something to be cheerful about.

Investors who owned shares in Australia’s biggest bank (by market value) as at 16 February 2016, will today receive their dividend payment of $1.98 per share owned. In total, the bank is handing out around $3.4 billion, much of which will likely end up being invested straight back into the share market.

Given that its shares have risen a little over 2% today, it’s possible that some of the money is finding its way back into Commonwealth Bank’s shares. However, many investors will likely take a more cautious approach and either hold onto the cash for a while, or put the proceeds towards other businesses.

After all, the banks have had a turbulent week or so after Australia and New Zealand Banking Group (ASX: ANZ) announced an increase in bad debt charges. Add to that the fact that the banks are being forced to hold more capital and could be required to cut dividends at some point in the future, and investors may decide Commonwealth Bank’s shares aren’t the best place for their money after all.

Indeed, plenty of investors will also benefit on the back of a generous payout from Telstra Corporation Ltd (ASX: TLS) tomorrow, while Wesfarmers Ltd (ASX: WES) and Coca-Cola Amatil Ltd (ASX: CCL) are among those companies paying their dividends next week.

In total, more than $19 billion is expected to be added to the pockets of investors, according to The Australian Financial Review, and you could be among those that will benefit. Rather than settling for the banks, it may be worth considering some other income ideas instead.

For instance, our resident dividend expert recently named his Top Dividend Share for 2016. Not only are the shares cheap, the company is trading on a fat, fully franked dividend yield. Simply click here to gain access to this comprehensive FREE investment report, including the name of this fast growing ASX dividend share. No credit card required!

Motley Fool contributor Ryan Newman has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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