Commonwealth Bank of Australia (ASX: CBA) shares have been on a record-breaking streak recently.
Since the stock endured a "technical correction" in September-October last year, it's been all uphill for shareholders with the stock rising an incredible 22.3% in that time. On Friday, it proved its haters wrong when it surged to a new all-time high at $90.
Who knows, it may even have its sights set on $100 by the end of the year if it plays its cards right.
Aside from its growing profits and the assumption of 'less risk' that comes with a blue chip stock, it's been the bank's incredible dividend yield that has kept investors coming back for more. In a low interest rate environment, Commonwealth Bank's dividend has stood out like no other, with the obvious exception being that of Telstra Corporation Ltd (ASX: TLS).
While Commonwealth Bank has consistently increased its shareholder distributions over the decades however, there's something you may not know about its dividend moving forward.
Knowing this may change your mind about buying the bank's shares
The Murray Financial System Inquiry, released late last year, highlighted the need for Australia's big four banks to hold more capital in reserve whilst also changing the way they assess risk on home loans. It's likely that the increased costs would be passed onto customers, which may involve higher interest rates for borrowers and lower interest rates for savers.
Unfortunately, it could also mean lower dividends for shareholders. That would be bad news for investors holding shares in Commonwealth Bank, National Australia Bank Ltd. (ASX: NAB), Australia and New Zealand Banking Group (ASX: ANZ) and Westpac Banking Corp (ASX: WBC) – all of which could be impacted.
I bet you didn't know that about Commonwealth Bank's dividend!
Given the role their dividends have played in driving the shares higher, a reduction in dividend growth could definitely see investors run for the exits, resulting in a declining share price.
