Later today eligible shareholders of Commonwealth Bank of Australia (ASX: CBA) will be paid the banking giant's interim dividend.
Commonwealth Bank will pay its shareholders a fully franked dividend of $2.00 per share.
Whilst many shareholders will use these funds as a source of income, others may wish to reinvest them back into the share market.
For those in the latter group, here's where I would invest these dividends:
BHP Group Ltd (ASX: BHP)
If you're looking for more dividends and not averse to investing in the resources sector, then BHP could be a good option. Although its Petroleum business has been hit hard by a material drop in oil prices, its Iron Ore operations continue to benefit from sky high prices. I expect this to remain the case for some time to come thanks to potential stimulus in China. Which should lead to BHP generating high levels of free cash flow that will support generous dividend payments. At present I estimate that its shares offer a fully franked forward ~6% dividend yield.
Kogan.com Ltd (ASX: KGN)
Investors that are looking for a combination of growth and income might want to take a look at this ecommerce company. I think Kogan is well-positioned to benefit from the recent closure of retail stores nationwide because of the coronavirus. I expect this to lead to strong sales, earnings, and dividend growth in FY 2020 and also in FY 2021 if it can leverage its growing customer base. Based on its last close price, Kogan's shares offer a fully franked 3% dividend yield.
NEXTDC Ltd (ASX: NXT)
A final option to consider buying with your Commonwealth Bank dividends is NEXTDC. It is a leading Data Centre-as-a-Service provider to enterprise and government customers across the country. Thanks to its world-class centres and exposure to the cloud computing boom, I believe it is well-placed to deliver very strong earnings growth over the next decade. Though, its shares do trade at a premium, so this is certainly a higher risk option for investors.
