Owning Commonwealth Bank of Australia (ASX: CBA) shares has been a pleasing pick for dividends for decades. Investors can unlock $1,000 or more of passive income from the ASX bank share if they buy enough shares.
One of the great things about owning Australian banks is that the dividends typically come with franking credits attached. That is a credit for the income tax the company has paid – this ensures the (Australian) shareholder isn't taxed twice on the profit (once in the company's hands and again when it's paid as a dividend).
CBA has been one of the most reliable dividend payers in the banking sector over the last three decades.
It has steadily grown its payout since the impacts from COVID-19 in 2020, while the 2010s saw pleasing payout growth for shareholders.
We're going to look at what it would take to unlock a sizeable amount of annual dividends.
$1,000 of annual passive income
The business is expected to hike its payout by 8% in FY26 to $5.25 per share, according to the (independent) projection on CommSec. That translates into a potential grossed-up dividend yield of 4.8%, including franking credits.
Based on the cash payment alone, investors would need to own 191 CBA shares to receive $1,000 of annual passive income. To acquire that number, it would require an investment of just under $30,000, at the time of writing.
If we include the franking credits as part of the income goal, this would mean investors would only need to own 134 CBA shares. That would be a cost of close to $21,000.
Of course, the projected payout for FY26 is just the current financial year. The estimated payout on Commsec suggests the FY27 payout could rise another 4.75% to $5.50 per share.
Is this a good time to buy CBA shares?
The CBA share price has dropped nearly 20% since June 2025.
While this decline has made the ASX bank share more affordable, analysts are still doubtful that the business is attractive value.
According to the Commsec collation of analyst ratings on the business, there are 15 recommendations, none of which are buys. There are 13 sell ratings on the ASX bank share and two hold ratings.
Accordingly, if I were looking for growth or passive dividend income, there are plenty of other options I'd choose first.
