On Wednesday the Commonwealth Bank of Australia (ASX: CBA) share price finished the day flat at $71.24.
This means that the banking giant's shares are trading roughly in line with where they started the year and are down 10% over the last 12 months.
Should you buy shares?
While I wouldn't buy any bank shares until after the Royal Commission final report is released on Monday afternoon, I do think CBA could be worth considering as an investment if there are no nasty surprises included in the report.
Though, I don't think it is the best value bank available for investors to choose from right now.
In fact, I believe it is the least attractive option amongst the big four banks with Australia and New Zealand Banking Group (ASX: ANZ), National Australia Bank Ltd (ASX: NAB), and Westpac Banking Corp (ASX: WBC) all offering greater value at current prices.
This is because at present CBA's shares are changing hands at a touch under 13x earnings and 1.9x book value.
Whereas ANZ's shares trade at 10x earnings and 1.2x book value, NAB's shares are priced at 10.5x earnings and 1.25x book value, and Westpac's shares are trading at around 11x earnings and 1.3x book value.
CBA's shares have traditionally traded at a premium to the rest of the big four due to being regarded as the highest quality bank in Australia, but I'm not sure the market believes this premium is as deserved anymore. As a result, I suspect its upside potential could be limited in 2019.
Another reason I prefer the other three big four banks is their trailing fully franked dividend yields.
ANZ's shares currently offer a 6.3% yield, NAB's shares offer an 8.1% yield, and Westpac's shares provide a 7.5% yield. Whereas CBA's shares offer a 6% yield at present.
Which bank should you buy?
My top pick in the sector right now is ANZ, closely followed by NAB. This is because both these banks are trading on lower than average multiples, provide generous dividends, and have overweight exposure to the business lending market which is performing strongly.
