Bought $8,000 worth of CBA shares 3 years ago? Here's how much passive income you've already earned

CBA has a lengthy track record of paying two annual fully-franked dividends per year.

| More on:
Woman holding $50 notes and smiling.

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

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.

Motley Fool contributor Bernd Struben 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.

More on Dividend Investing

Man holding Australian dollar notes, symbolising dividends.
Dividend Investing

Which major ASX energy share will pay the best dividend yield in FY24?

And are ASX energy shares usurping mining and banking stocks when it comes to dividends?

Read more »

A florist gets some good news on his laptop and tablet, a big smile on his face as he is surrounded by flowers.

ASX gold investors, get ready for Newmont's first dividend

ASX newcomer Newmont is about to fork out its first dividend.

Read more »

Hand with Australian dollar notes symbolising ex-dividend date.
Dividend Investing

Here are 3 ASX dividend shares to buy for big yields

Here's what sort of yields analysts are forecasting from these shares.

Read more »

Modern accountant woman in a light business suit in modern green office with documents and laptop.
Dividend Investing

This 10% ASX dividend stock is my pick for superior income in 2024

This share could pay huge income next year.

Read more »

Man holding out Australian dollar notes, symbolising dividends.
Dividend Investing

Start making passive income immediately with this ASX 200 dividend stock

Dividends are rapidly growing from this stock.

Read more »

Three satisfied miners with their arms crossed looking at the camera proudly
Dividend Investing

3 top ASX 200 mining shares for bank-busting dividend income in 2024

All three ASX 200 mining shares pay fully franked dividends.

Read more »

An older couple use a calculator to work out what money they have to spend.
Dividend Investing

Retirees: 2 high-yield ASX dividend shares to buy for passive income

Income investors have to be careful to not lose 40% of capital while raking in 20% yield.

Read more »

Copal miner standing in front of coal.
Dividend Investing

Should you buy New Hope stock for its 10% dividend yield?

These shares look cheap right now. But will they sink even further from here or are there brighter days ahead?

Read more »