Commonwealth Bank of Australia shares hit a 52-week low: Time to buy?

The Commonwealth Bank of Australia (ASX: CBA) share price has been amongst the worst performers on the market today and has acted as a major drag on the performance of the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO).

In late afternoon trade the shares of Australia’s largest bank are down over 2.5% to $72.92. At one stage its shares were down to a 52-week low of $72.82.

CommBank isn’t the only bank share that has sunk lower today, there have been similar declines across the entire sector.

As we approach the close the Westpac Banking Corp (ASX: WBC) share price is down 2.5% to $28.85, the National Australia Bank Ltd. (ASX: NAB) share price is 1.7% lower to $28.95, and the Australia and New Zealand Banking Group (ASX: ANZ) share price has dropped over 2% to $27.58.

It appears as though both the Royal Commission and today’s market meltdown have weighed heavily on the sector.

Has this created a buying opportunity?

Whilst it might be best to wait for the dust to settle before making a move, I do think that investors ought to consider CommBank after today’s decline.

After all, at the current price CommBank’s shares now provide investors with a generous trailing fully franked 5.9% dividend.

This yield may not be as wide as some of its peers, but it is certainly better than the market average and the best that its shares have provided for some time.

My preference continues to be Westpac, though, especially after its sizeable share price decline today. I believe it has solid growth prospects and could even grow its dividend in FY 2018 and FY 2019.

But once again, I will reiterate that I think investors ought to wait a few days before making a move on banks shares as there could potentially still be further declines to come.

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Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of National Australia Bank Limited. 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 Scott Phillips.

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