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

A happy male investor turns around on his chair to look at a friend while a laptop runs on his desk showing share price movements
Dividend Investing

Brokers name the ASX dividend shares to buy now

Let's see what they are saying about these income options.

Read more »

Different Australian dollar notes in the palm of two hands, symbolising dividends.
Dividend Investing

This 5% monthly dividend stock is a cash flow machine

If you want monthly passive income, check out this stock.

Read more »

A woman presenting company news to investors looks back at the camera and smiles.
Dividend Investing

Broker names the best ASX dividend shares to buy now

Let's see why the broker is feeling bullish about these income options.

Read more »

A cute little kid in a suit pulls a shocked face as he talks on his smartphone.
Dividend Investing

Up 38% in a year, is it too late to buy Telstra shares for the dividends?

A leading expert gives his verdict on Telstra’s passive income appeal following the stock's 38% 12-month share price gains.

Read more »

A young woman dressed in street clothes leaps happily in the air with the focus on her bright red boots that are front and centre for the camera.
Dividend Investing

This ASX dividend share is projected to pay a 10% yield by 2028

Analysts are expecting big payouts from this business.

Read more »

A couple sits in their lounge room with a large piggy bank on the coffee table. They smile while the male partner feeds some money into the slot while the female partner looks on with an iPad style device in her hands as though they are budgeting.
Dividend Investing

Want to turn $20K into a $1K second income? Here's how

ASX shares can pay you upfront for buying them...

Read more »

A man and woman sit next to each other looking at each other and feeling excited and surprised after reading good news about their shares on a laptop.
Dividend Investing

2 ASX dividend shares I think are great value today

These two stocks offer a lot of what I’m looking for.

Read more »

Excited couple celebrating success while looking at smartphone.
Dividend Investing

Buy Woodside and these ASX dividend stocks

Brokers have put buy ratings on these dividend payers.

Read more »