MENU

Commonwealth Bank on the way to $8.4 billion profit

Commonwealth Bank (ASX: CBA) could be set to deliver an annual profit of around $8.4 billion when it reports next August, based on its first-quarter results released earlier this week.

The bank announced a profit of $2.1 billion for the September quarter on Wednesday – a massive 14% higher than what it achieved in the prior corresponding period. Analysts believe that this performance could be maintained for the remainder of the year. UBS analyst Jonathon Mott raised his forecast from $8.1 billion to $8.4 billion whilst Deutsche Bank analyst James Freeman increased his by 3% to $8.3 billion.

Investors have embraced the result, pushing the bank’s shares to a record high of $79.32 yesterday whilst its main competitors, Westpac (ASX: WBC), NAB (ASX: NAB) and ANZ (ASX: ANZ) each fell as the latter two traded ex-dividend.

However, investors shouldn’t go crazy buying shares in the bank. As is currently the case with each of the banks, most of the good news is already priced into the value of shares and it is difficult to see how the incredible performances can be maintained in the long-term. As such, it may be appropriate for investors to look elsewhere for stocks to add to their portfolio.

A more attractive alternative

For instance, look no further than our #1 dividend-paying stock. Discover The Motley Fool's favourite income idea for 2013-2014 in our brand-new, FREE research report, including a full investment analysis! Simply click here for your FREE copy of "The Motley Fool's Top Dividend Stock for 2013-2014."

Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

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.