Market heavyweights Commonwealth Bank of Australia (ASX: CBA) and CSL Limited (ASX: CSL) are in a neck-and-neck race to see which ASX-listed stock will hit the $100 mark first.
Commonwealth Bank, which is Australia's largest bank with a market value of $155 billion, continued its ascent yesterday, driving the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) to its biggest single-day rise in five weeks. Given its generous dividend yield, the stock soared on heightened expectations of a Reserve Bank of Australia interest rate cut in the near future. While it closed at a record high of $95.61, it has retreated marginally in today's session to be trading at $95.41.
CSL has its nose marginally in front of Commonwealth Bank with its shares now sitting at $95.87, up 0.7% for the day. The biopharmaceutical giant, which boasts a market capitalisation of almost $45 billion, makes blood-related products such as blood plasma and is expanding overseas, which will ensure it benefits from a weaker Australian dollar.
Which will hit their mark first?
It's difficult to say which of CSL Limited or Commownealth Bank will crack the $100 mark first. On the one hand, Commonwealth Bank will continue to garner investor support in the event of an interest rate cut (or even expectations of one), but CSL offers far greater value on a price per share basis.
Commonwealth Bank's shares are widely considered to be overpriced and are being driven by investors' insatiable hunger for high-yield dividends. Some analysts have a higher price target on CSL (for example, Goldman Sachs has a target of $107 while Macquarie is targeting $102), but whether or not CSL reaches the target first is impossible to predict.
However, given the valuations carried by both stocks, CSL certainly presents as the better buy today – regardless of which company hits the $100 mark first.
