Should you buy CBA shares before they trade ex-dividend?

This morning GUD Holdings Limited (ASX: GUD) shares and Insurance Australia Group Ltd (ASX: IAG) shares will trade ex-dividend for their latest dividends.

Eligible GUD shareholders will be paid its 25 cents per share dividend on March 1, whereas eligible Insurance Australia Group shareholders can look forward to receiving their 12 cents per share dividend payment on March 20.

Another company which sees its shares trade ex-dividend this week is Australia’s biggest bank, Commonwealth Bank of Australia (ASX: CBA).

The banking giant’s shares go ex-dividend for its fully franked $2.00 per share interim dividend on Wednesday, meaning today is your last chance to buy shares and qualify for it.

Should you buy CBA’s shares for its interim dividend?

If you have limited exposure to the banking sector then I think it could be worth snapping up shares today in order to qualify for this dividend.

However, while I think CBA’s shares are in the buy zone, I do feel that the rest of the big four are far better value. Especially Australia and New Zealand Banking Group (ASX: ANZ) shares.

This is because CBA’s shares are currently changing hands at 13.5x earnings and 1.9x book value and ANZ’s shares are trading at just 10.5x earnings and 1.3x book value. In addition to this, the dividend yield on ANZ’s shares currently stands at 6%, compared to 5.8% for CBA’s shares.

I believe this points to limited upside for CBA’s shares over the next 12 months, whereas I feel ANZ’s shares could climb meaningfully higher from here.

I’m not alone in thinking this way. A note out of Goldman Sachs reveals that its analysts currently have a neutral rating on CBA’s shares with a $71.55 price target, whereas it has ANZ on its conviction buy list with a price target on $29.58.

JUST RELEASED: Our Best Non-Bank Dividend Picks for February

NEW! The Motley Fool’s team of crack analysts has just released a timely report revealing the names and codes of their top 3 dividend share recommendations for 2019. Be among the first investors to get access—FREE, for a strictly limited time. You’ll discover the names of 3 hefty dividend paying companies with what our analysts consider to be solid growth prospects for the year ahead…

The first two currently offer fat, fully franked yields and the third is a surprising REIT offering you the chance to become a landlord with none of the hassle! If you’re looking for hot new ideas, look no further. But you do need to hurry. Snap up your free copy now, before supplies run out!

Simply click here to grab your FREE copy of this up-to-the-minute research report on our top 3 dividend share recommendations right away.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Insurance Australia Group 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.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…


The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!