If I buy 1,000 CBA shares, how much passive income will I receive?

CBA's dividends might not be as lucrative as you'd think…

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Investors have been buying Commonwealth Bank of Australia (ASX: CBA) shares for the sole purpose of receiving meaningful dividend income for decades.

That's fair enough. Ever since CBA shares were first floated on the ASX back in the 1990s, this ASX 200 bank stock has paid out healthy and fully-franked dividend payments.

Over the past few years, this passive income from CBA shares has generally increased, aside from the understandable blip during the COVID pandemic. In 2019, CBA shares doled out $4.20 in dividend income per share. By 2023, this had risen to $4.50.

However, the CBA share price has risen far faster than its dividends have in recent years.  Since May of 2019, investors have enjoyed more than 55.5% in capital gains alone from CBA shares.

Whilst this has been fantastic for long-term shareholders, it has also had a deleterious effect on the CBA dividend yield. Remember, when a company's share price increases, the running dividend yield on new share buys goes down.

So today, let's talk about how much dividend income one can expect if one buys 1,000 CBA shares at current pricing.

How much dividend income would 1,000 CBA shares get you?

So at the time of writing, Commonwealth Bank stock is trading at $121.64 a share, down 0.13% for the day so far. This price is only a whisker from the new all-time high of $122.55 that we saw CBA shares clock only last week.

At the current price, CBA is trading on a trailing dividend yield of 3.74%. That's far lower than CommBank's big four peers. For example, ANZ Group Holdings Ltd (ASX: ANZ) shares are presently boasting a far larger 6.18% yield today. But we digress.

This 3.74% CBA dividend yield comes from the bank's last two dividend payments. The first was the final dividend worth $2.40 per share that shareholders bagged back in September last year. The second, was the interim dividend of $2.15 a share that was paid out back in March. Both payments came fully franked, as is CBA's habit.

That's an annual total of $4.55 per share in passive income. If an investor owned 1,000 CBA shares today (worth $121,640 at current pricing), they would have received $4,550 in dividend income over the past 12 months.

Past and future passive income

Saying that, this just represents what investors would have received over the past 12 months, not what the will receive going forward. No one knows what kinds of dividends any company will pay out in the future until the said company makes the announcement. As such, no one should bank on CBA shares continuing to pay out $4.55 in annual dividends per share going forward.

However, this is the likeliest scenario, at least according to one ASX expert.

As my Fool colleague covered earlier this month, ASX broker Goldman Sachs is expecting CBA shares to continue to pay out an annual $4.55 in dividends per share over the coming 12 months. In fact, Goldman has pencilled in $4.55 in dividends per share for FY2024, as well as both the 2025 and 2026 financial years.

We'll have to wait and see if Goldman's predictions prove prescient. But if this expert is on the money, investors can continue to expect to receive $4,550 in dividend income for every 1,000 CBA shares they own for the foreseeable future.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. 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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