The Commonwealth Bank of Australia (ASX: CBA) share price is down 0.58% at time of writing. That's right in line with the broader S&P/ASX 200 Index (ASX: XJO), down 0.51%.
Commonwealth Bank's shares have underperformed the other big 4 banks over the past 12 months, with shares up 28% since 17 March 2020.
Australia and New Zealand Banking Grp Ltd (ASX: ANZ) leads the big 4, with the share price up 54%
National Australia Bank Ltd (ASX: NAB) comes in a close second, with shares up 51%
And the Westpac Banking Corp (ASX: WBC) share price has gained 42% in 12 months.
So is the Commonwealth Bank share price a buy or hold at today's level?
That depends on who you ask and how far along you think the ASX 200 is on the reflation curve.
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Commonwealth Bank shares a hold
Romano Sala Tenna is the portfolio manager at Katana Asset Management. And he believes that the big 4 banks, all up significantly in 2021, are fully valued. As the Australian Financial Review points out "the ASX banks index is up almost 20 per cent since the start of the year".
That has Sala Tenna keeping a careful eye on Katana's bank share holdings. He said:
Momentum is still there, sentiment is still there, so we are happy to hold [the big 4 banks] for the course. But once we think that sentiment and momentum changes, we will move to the door on those as well.
Commonwealth Bank shares a buy
Plato Investment Management managing director Don Hamson has a different take on Commonwealth Bank shares. And that's all to do with its juicy dividend potential.
Out of the big 4 banks Hamson picks Commonwealth Bank as the top income investing share.
According to Hamson:
Its $1.50 dividend equates to only 67% of earnings and the bank has said its pay-out ratio is likely to be 70 to 80% this year, so a stronger second-half dividend is expected. There's also the possibility management will use excess franking credits to undertake an off-market buyback in the coming year, which will be a lucrative opportunity for retirees in particular.
