Commonwealth Bank of Australia’s 5.1% fully franked dividend yield

Commonwealth Bank of Australia (ASX:CBA) has a massive 5.1% fully franked dividend yield.

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CBA share price

Commonwealth Bank of Australia (ASX:CBA) is forecast to pay a massive 5.1% fully franked dividend. For investors who bought Commonwealth Bank shares before 2017, not only will you receive that big dividend you are also likely well ahead on your investment.

Commonwealth Bank Share Price

Source: Google Finance
Source: Google Finance

Commonwealth Bank has a history of paying great dividends and increasing profits year after year, that’s why its share price has risen so spectacularly.

In fact, if we go back to a time in the early 90’s Commonwealth Bank shares were trading around $6 and paying a 40 cents per share dividend — equivalent to 6.6%.

It’s now over $80 and the shares are paying dividends around $4.20 per share over the full year.

Commonwealth Bank Dividend History

Data sourced from
Data sourced from

Imagine if you still held shares from 20 years ago. In addition to all those dividends you would have received, and the capital gains you would today be nursing — your $4.20 forecast 2017 dividend would be equivalent to a yield of 70% fully franked. That’s long-term investing.

Foolish Takeaway

Commonwealth Bank of Australia shares trade at a premium valuation to the market, but it is easy to see why. Commbank has continued to power ahead in terms of market share, investment in technology and customer satisfaction.

For new investors today, I think CBA is too expensive to buy shares. Investors should wait until we are offered better prices — I’d start to get excited below $75 and look to buy well below $70.

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Motley Fool Contributor Owen Raszkiewicz does not have a financial interest in any company mentioned. Owen welcomes -- and encourages -- your feedback on Google+, LinkedIn or you can follow him on Twitter @OwenRask. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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