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Commonwealth Bank of Australia is down 10% – is now the time to buy?

Despite strong support from the nation’s largest miners, the Australian stock market has continued its woeful run today with the benchmark S&P/ASX 200 (INDEXASX: XJO) plummeting a further 1%. With today’s drop included, the market has now dropped a massive 7.8% since its peak last month.

Just another 2.2% and we’ll officially be in a “technical correction”.

As I warned over the last few months, it has come to pass that Commonwealth Bank of Australia (ASX: CBA) and its banking peers have led the charge downwards.

Until recently, the big four banks were the ‘go-to’ stocks, thanks to their ‘defensive’ natures and generous dividend yields. Now, investors are focusing on the risks facing the industry and the excessive share prices and selling them down en masse.

Commonwealth Bank has today dropped $1.01 or 1.3% and is trading at just $75.16. Although it might seem far more compelling now than when it was trading near $84 recently, investors still ought to steer clear as I think there could be more pain in store. The same goes for Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd. (ASX: NAB) and Australia and New Zealand Banking Group (ASX: ANZ), all of which are down between 1.6% and 2.1% today.

A much better buy than the banks

While I remain bearish on the banks even at today’s prices, I still believe that investors will continue to turn to high-yielding dividend stocks for the foreseeable future. Not only are they an excellent way to compound your wealth over the long term, but they can also provide a steady and reliable source of income for investors.

If that’s what you’re looking for, then I urge you to consider this ultra-promising ASX stock which offers a fat, fully franked dividend in addition to fantastic growth potential – something that most would consider an unbeatable combination.

Although this stock still appears to be cheap, I doubt it will be for long. That’s because once the ‘experts’ realise its true potential, the stock could jump strongly, perhaps never looking back down.

So I urge you to take a look at our FREE investing report right now, before it’s too late. To access your copy, simply click the link below, enter your email and unlock this promising stock before you miss the boat.

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

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