If I invest $10,000 in CBA shares how much passive income will I receive?

Will CBA be giving your passive income a nice boost in the near term?

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One of the most popular options out there for investors seeking passive income is Commonwealth Bank of Australia (ASX: CBA).

The banking giant's shares are found in countless income and super portfolios across the country. And this is for good reason. CBA is arguably one of the highest quality banks in the world and its shares more often than not provide investors with a generous dividend yield.

But will that be the case if you were to invest $10,000 into CBA shares right now? Or have you missed the boat on this one?

A smiling woman with a handful of $100 notes, indicating strong dividend payments

Image source: Getty Images

How much passive income will CBA shares generate?

If you are lucky enough to have $10,000 at your disposal and decided to put it to work with CBA shares, based on its current share price, it would result in you owning 101 shares.

While that might not sound like a big holding, don't let the numbers fool you. This is a decent investment and could provide you with a nice passive income boost.

For example, according to a recent note out of Morgans, its analysts are forecasting fully franked dividends per share of $4.26 in FY 2023 and then $4.20 in FY 2024. Based on the current CBA share price of $98.96, this will mean dividend yields of 4.3% and 4.25%, respectively.

It will also mean that your $10,000 investment would yield passive income of approximately $430 in FY 2023 and $424 in FY 2024.

Should you invest?

Morgans appears to believe Australia's largest bank could be a decent option for investors. The broker has CBA on its best ideas list again this month. It commented:

The second largest stock on the ASX by market capitalisation. We view CBA as the highest quality bank and a core portfolio holding for the long term, but the trade-off is it is the most expensive on key valuation metrics (including the lowest dividend yield). Amongst the major banks, CBA has the highest return on equity, lowest cost of equity (reflecting asset and funding mix), and strongest technology. It is currently benefitting from the sugar hit of both the rising rate environment and relatively benign credit environment.

Motley Fool contributor James Mickleboro 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 Scott Phillips.

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