The Commonwealth Bank of Australia (ASX: CBA) share price has been on the mend after a volatile month on the ASX.
Despite finishing 0.23% lower to $105.20 at Friday's market close, shares in Australia's largest bank have soared 12.5% since March.
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What's driving CBA shares higher?
Investors have been bidding up the CBA share price regardless of the current macroenvironmental headwinds in the global economy.
High inflation levels, along with concerns about a potential recession, have led to strong declines across international markets.
However, the banking giant has remained relatively resilient with a few brokers weighing in on CBA shares.
Morgan Stanley has a sell rating on Commonwealth Bank shares but if interest rates climb, this could be beneficial to the major bank.
As such, the broker cut its 12-month price target by 1.1% to $91.00 on CBA shares. This represents a decline of roughly 13% from where they trade today.
In addition, Goldman Sachs has a similar price point, lifting its 12-month outlook by 1.7% to $89.86 a share.
The company reported impressive half-year results in February, underpinned by favourable business outcomes.
It's worth noting that the Commonwealth Bank is conducting a $2 billion off-market share buyback to reduce surplus capital and increase shareholder value. The capital management program is expected to reduce its CET1 ratio to 11.4% once completed.
Basically, this means that when CBA buys back its shares, the number of shares on its registry will decrease. With a lesser amount, this effectively increases the value of each share as the revenue and profits remain the same.
Traditionally, when this occurs, a company's share price tends to rise over time.
CBA shares are just 4.5% off their all-time high of $110.19 reached in November 2021.
How much is CBA paying in dividends?
According to Goldman Sachs, CBA could pay a fully-franked final dividend of $2.00 per share for FY22.
Coupled with the interim dividend of $1.75, the full-year dividend would come to $3.75 per share. This reflects a 7.1% increase on FY21's dividend. The targeted full-year payout ratio is between 70% to 80% on the bank's cash earnings.
When factoring in the current CBA share price along with its full-year dividend, CBA's dividend yield rises to 3.56%.
About the CBA share price
In 2022, the CBA share price is up around 4% after a bumpy ride at the start of the year.
On valuation grounds, CBA is the second largest company on the ASX with a market capitalisation of approximately $179.5 billion.
