The CBA (ASX:CBA) share price has gained 20% in the last 6 months

Why have CBA shares been on fire for the past 6 months?

| More on:
Cool woman in a bright yellow suit and sunglasses excited about the cash she's splashing, flicking notes all around her.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It's not much of a secret to say that the S&P/ASX 200 Index (ASX: XJO) has enjoyed a rather stellar six months. Not only has the ASX 200 hit a series of new all-time highs between March and the present, but it has also given us a rather successful earnings season on the whole over August too. In fact, between 3 March and today, the ASX 200 has managed a healthy gain of 10.3%. But one major ASX 200 constituent has done one better on the ASX 200. Almost doubled its returns in fact. That would be the Commonwealth Bank of Australia (ASX: CBA) share price.

Yes, CBA, the largest ASX 200 company by market capitalisation (and therefore weighting) has had a truly stellar six months. Since 3 March, CBA shares have gone from roughly $85.40 a share to Friday's closing share price of $101.88. That's a gain of 19.3% – almost double that of the broader ASX 200.

What has made the CBA share price a market-beating investment over the past 6 months?

This period has also seen a series of new all-time highs for the CBA share price. The bank first broke above $100 a share for the first time ever back in early June, going on to hit $106 a share by the middle of the month. Then, CBA shares hit their current all-time high of $109.03 last month. The catalyst for that move was the bank's FY21 earnings report.

This earnings report has really been the event CBA shares were building up to all year. Even before Commonwealth Bank released its numbers, speculation was swirling that the ASX's largest bank would be raining dividends and share buybacks on its investors. These rumours arguably helped to push CBA shares higher all year.

Well, CBA didn't disappoint on 11 August when its earnings finally arrived. The bank told investors that they would be receiving a $2 per share final dividend on 29 September. It also revealed the details of a $6 billion share buyback program, which will even give some existing investors a hefty tax break if they sell their shares back to CBA. 

It was right after this announcement that CBA hit its new all-time high. In the weeks since, the CBA share price has cooled somewhat. It's now down almost 7% from its high watermark. Even so, this ASX bank has proven to be a fantastic investment in 2021 so far.

At the last CBA share price, this ASX bank has a market capitalisation of $179.84 billion, and a dividend yield of 3.44%.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Bank Shares

A corporate female wearing glasses looks intently at a virtual reality screen with shapes and lights representing Block shares going up today
Bank Shares

Are Westpac shares a buy following the bank's big tech update?

Is now a good time to buy the banking giant's shares? Let's find out.

Read more »

Different Australian dollar notes in the palm of two hands, symbolising dividends.
Bank Shares

Own CBA shares? It's payday for you!

A dividend is heading to CBA shareholders’ bank accounts.

Read more »

A man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share price
Bank Shares

Are CBA shares really worth $120?

It has been a good year for ASX bank shareholders.

Read more »

a group of people sit around a computer in an office environment.
Bank Shares

Westpac shares push higher on $9.8b technology simplification plan

Westpac plans to spend big on technology to close the gap on its rivals.

Read more »

A worried woman looks at her phone and laptop, seeking ways to tighten her belt against inflation.
Economy

NAB boss issues dire prediction for Aussie economy

NAB’s CEO has issued a stark warning on the outlook for Australia’s economic growth.

Read more »

Contented looking man leans back in his chair at his desk and smiles.
Bank Shares

Own CBA shares? Here's the tech stock the banking giant just invested in

CBA has made an interesting investment. Here's what you need to know.

Read more »

A woman gives two fist pumps with a big smile as she learns of her windfall, sitting at her desk.
Bank Shares

ANZ shares charge higher on $57.5 million class action settlement news

ANZ shares have continued their positive run on Monday.

Read more »

Two people comparing and analysing material.
Bank Shares

Better buy: CBA or Westpac stock?

Which ASX bank share is a better buy?

Read more »