Commonwealth Bank of Australia (ASX: CBA) shares have not only delivered some healthy capital gains over the past three years, but they've also paid out a sizeable amount of passive income.
The S&P/ASX 200 Index (ASX: XJO) bank stock has a lengthy track record of paying two annual fully franked dividends per year. Even during the 2020 pandemic market turmoil.
Going back three years you would have just missed the final CBA dividend payment of 2020.
But you would have been eligible for the last six dividends. And you could have bought the bank stock in October 2020 while it was still in recovery mode from the early COVID sell-off.
So, how much passive income would you already have earned buying CBA shares three years ago?
I'm glad you asked!
Tapping CBA shares for passive income
Three years ago, CBA shares were trading for $69.90 apiece.
Passive income aside, that equates to a 41% gain if you were to sell at the current $98.37 price.
As for the dividends, CBA paid $3.50 per share in 2021, $3.85 per share in 2022, and $4.50 per share in 2023.
The 2023 figure includes the all-time high final dividend payout of $2.40 per share. If you owned shares, you'll have seen that passive income land in your bank account last month, 28 September.
Now, a bit of back-of-the-napkin maths tells us CBA has delivered a total of $11.85 per share in fully franked dividends since 24 October 2020.
And my trusty calculator tells us, you could have bought 114 shares (at $69.90 apiece) with your $8,000 investment three years ago. With enough money left over for a movie ticket and a small popcorn.
That equates to $1,350.90 in passive income from that initial investment, with some potential tax benefits from those franking credits.
And if you opted to sell those CBA shares today, you'd book another $3,214 in gains from the share price appreciation.
Of course, then you'd miss out on any potential future share price gains. Not to mention that historically reliable passive income.
