Will Commbank increase its dividend?

Commonwealth Bank’s (ASX: CBA) stellar profits are tipped to inspire the board to increase its payout to investors by an extra 30 cents. After substantially increasing its first half dividend to $1.64, analysts believe the full year dividend to June will come to around $3.64, compared to $3.34 this time last year.

With Commbank’s profit expected to reach a new record high of approximately $7.6 billion, shareholders are demanding more. ANZ (ASX: ANZ) has also put pressure on Australia’s biggest lender to cough up since upping its interim dividend by around 11% earlier this year.

The big four banks dividends are creating great yield plays for investors and lower prices pose a great opportunity for those looking to secure a stable long-term income.

However, Commbank is trading at much higher earnings ratio than its top four counterparts, which could mean that the markets expectations are weighing in on the stock. Compared to its peers, it currently has less growth in the near future and less dividend yield.

NAB (ASX: NAB) and Westpac (ASX: WBC) both sport dividends over 6% and will make great additions to investors’ portfolios as ‘core’ stocks.

In the market for high-yielding ASX shares? Get “3 Stocks for the Great Dividend Boom” in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

More reading

Motley Fool contributor Owen Raszkiewicz owns shares in ANZ.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.