The current dividend yield on Commonwealth Bank of Australia (ASX: CBA) shares is arguably woeful right now. Objectively, a 3.96% dividend yield, replete with full franking credits, doesn't seem that bad on the surface. However, by ASX 200 bank share standards, I think most investors would tell you that they've seen better.
Yes, CBA shares today sport a trailing dividend yield of 3.96%. That comes from the bank's total of $4.50 in fully-franked dividends per share that was paid out over 2023. Plugged into CBA's current $113.78 share price (at the time of writing), we get to a dividend yield of 3.96%.
That dividend yield indeed looks rather inadequate compared to CBA's big four banking brethren. To illustrate, National Australia Bank Ltd (ASX: NAB) shares come with a trailing yield of 5.4% today. Right now, Westpac Banking Corp (ASX: WBC) is offering 6.1%, while ANZ Group Holdings Ltd (ASX: ANZ) leads the pack with its stonking 6.75%.
So is there any chance that this substantial gap in dividend yield will improve over 2024? Will CBA's dividend yield improve this year?
Well, it's of course hard to say for certain. No one knows what any ASX 200 share's next dividend will be until the company in question reveals it. But we can take a look at what one ASX expert has recently predicted.
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What will happen to the dividends from CBA shares in 2024?
Last month, my Fool colleague James covered ASX broker UBS' views on the CBA share price. UBS is predicting that Commonwealth Bank will be able to fund a total of $4.78 in dividends per share over the 2024 financial year. That would of course be a decent increase over the $4.50 investors enjoyed over the 2023 calendar year.
If accurate, this would give the CBA share price a forward dividend yield of 4.2% at current pricing.
But it gets even better. UBS reckons CBA will be able to up the ante yet again in FY2025. The broker is pencilling in an annual dividend per share of $5.09 next financial year. If realised, this would give CBA shares a forward dividend yield of 4.47% at today's pricing.
So it seems that income investors are set for a couple of pay rises over the coming year or two from CBA shares, if UBS is to be believed.
Although this still wouldn't get CBA up to the same dividend levels as the other big four banks, it will still no doubt be welcomed by shareholders today if these predictions come to pass.
