Commonwealth Bank of Australia (ASX: CBA) shares are a popular option for income investors.
In fact, according to the banking giant's latest annual report, there are over 800,000 shareholders that receive dividends twice a year.
Clearly the bank's payouts have a notable impact on the wealth of the nation. But what is that looking like in the coming years? Let's see what analysts at Macquarie are forecasting for the CBA dividend though to 2028.
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CBA dividend forecast
As a reminder, last week Commonwealth Bank of Australia released its full year results and declared a fully franked final dividend of $2.60 per share, taking its total dividends for the full year to $4.85 per share.
Looking ahead, Macquarie has trimmed its dividend forecast for FY 2026 and now expects small increase to a fully franked $4.92 per share. Based on its current share price of $170.19, this represents a dividend yield of 2.9%.
In FY 2027, another modest year on year increase is expected by the broker despite its forecast for a slight earnings decline. It has pencilled in a fully franked dividend of $4.96 per share, which also represents a 2.9% dividend yield.
Finally, in FY 2028, its analysts are expecting CBA's earnings to rebound and underpin a fully franked dividend of $5.00 per share. This would mean a dividend yield of 2.9% as well.
Should you invest?
Unfortunately, Macquarie is one of a large number of brokers that believe that CBA shares are vastly overvalued right now.
According to the note, the broker has retained its underperform rating and lowly $105.00 price target on its shares. This implies potential downside of approximately 38% for investors over the next 12 months.
It notes that this is "based broadly on the mid-point between our relative P/E valuation ($127.75/share) and Gordon Growth valuation ($84.67/share)."
Commenting on its underperform recommendation, the broker said:
While we believe CBA is still a better franchise than peers, with minimal earnings growth forecasted over the next three years and further downside risk to consensus, we believe valuation of ~28x FY26E P/E and ~3.5x P/B remains detached from fundamentals. Maintain Underperform.
Earnings changes: There were minimal EPS changes in FY26-28E, driven by higher expenses but offset by lower impairments and slightly better noninterest income (prior to today's release we were 3-5% below consensus in FY26/27E).
