A lot of Australians receive passive income from owning Commonwealth Bank of Australia (ASX: CBA) shares, directly or indirectly.
Plenty of Australians may own CBA in their own name. Commonwealth Bank of Australia is also a significant position in the portfolios of Vanguard Australian Shares Index ETF (ASX: VAS) and BetaShares Australia 200 ETF (ASX: A200). Many people also likely own it in their superannuation fund.
With such an important position in Australia's share market, I think it'd be useful to see how many CBA shares it would take to generate $1,000 of passive income in 2027.
Image source: Getty Images
Dividend projection
Forecast dividends are not guaranteed payments, of course. However, analysts' forecasts are typically close to the estimated dividend figure, unless something unexpected happens (like COVID-19).
The CBA dividend has steadily grown each year since 2020, and the ASX bank share is expected to give investors another payout increase.
According to Commsec (which is independent), the bank is forecast to pay an annual dividend per share of $5.10 in FY26, and then slightly increase it by 1% year-over-year to $5.15 per share in FY27.
While 1% growth is not exactly shooting-the-lights-out speed, it's better than nothing. It helps offset some of the inflation and the payout is coming from one of Australia's bluest of blue-chips.
What is the 2027 CBA dividend yield?
Time will tell exactly what dividend the ASX bank share does pay in FY27, but assuming the bank does pay an annual dividend per share of $5.15 in 2027, it could lead to a decent dividend yield.
At the valuation at the time of writing, Commonwealth Bank could pay a dividend yield of 2.9% excluding franking credits and 4.1% including franking credits.
That's not the biggest dividend yield on the ASX, but it's solid, and the payout is currently growing each year.
How many CBA shares is needed for $1,000 of passive income?
Now that we know what Commonwealth Bank might pay in FY27, we can see what it would take to earn $1,000 of dividends from the ASX bank share.
Excluding franking credits, it would take 195 CBA shares to generate that much potential passive income in FY27. At the time of writing, that would take an investment of approximately $34,700.
If we include the franking credits as part of the dividend income, it would take only 136 CBA shares to generate that income. At the time of writing, that would take an investment of $24,200.
