The CBA share price trounced the benchmark again in June! Here's how

CBA shares once more defied the bears and charged higher in June. But how?

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The Commonwealth Bank of Australia (ASX: CBA) share price is marching higher on this last trading day of June.

Shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed yesterday at $126.20. As we head into the lunch hour on Friday, shares are swapping hands for $126.46 apiece, up 0.21%.

Looking to last month, CommBank stock ended May trading for $119.53 a share.

With only half a day of trade left in this month, that sees the CBA share price up 5.78% in June.

For some context, the ASX 200 is up 1.2% over this same period.

Here's what's been happening with Australia's biggest bank stock.

CBA share price keeps on giving in June

The CBA share price once more defied a chorus of bearish analysts who've labelled the big four bank as overvalued and recommended investors sell. Indeed, at a price-to-earnings (P/E) ratio of 22.12 times, CBA shares trade at the highest valuation of any of the ASX 200 bank stocks.

But we hope you didn't take their advice.

Investor support comes in part because the FY 2025 stage 3 tax cuts and other government cost-of-living relief measures have mitigated concerns over rising bad loans and potentially fuelled more consumer and business borrowing.

This bullish assessment helped the CBA share price notch a series of record highs in June, most recently on Tuesday the 25th.

Slipping yields

The downside of the fast-rising CBA share price, at least for passive income-focused investors, is the lower accompanying dividend yields.

CommBank has long been favoured by passive income investors for its reliable, twice-yearly, fully franked dividend payouts.

While those payouts have held up over the years, the yield has come to be significantly higher amid the soaring share price.

For example, in 2018, investors could have bought CBA shares for $68 apiece and earned a fully franked yield of 6.3%.

Today, with the CBA share price defying bearish forecasts to soar to $126.46, CommBank stock trades on a dividend yield of 3.6%.

Almost the biggest company again

With another strong share price rally in June, CBA closed the gap with BHP Group Ltd (ASX: BHP) to retake the crown of the biggest company on the ASX.

BHP grabbed that title from CBA in November 2021. That came amid a massive iron ore rally, which saw the iron ore price top US$200 per tonne.

But with BHP's share price dropping 3.22% in June (at the time of writing), the race for that title is heating up.

As its stands heading into July, CBA has a market cap of $211.77 billion compared to BHP's market cap of $218.43 billion.

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.

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