Commonwealth Bank of Australia (ASX: CBA) shares are paying more dividends than ever before.
And with shares in the S&P/ASX 200 Index (ASX: XJO) bank stock recently trading for $152.75 apiece, down 15.1% from their 6 August close, is CommBank stock now a good buy for passive income?
Let's have a look.
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Should I buy CBA shares for passive income?
While we could look at the forward dividend yields for CBA, those are simply based on analysts' current best forecasts. Or guesses, if you will.
With the future inherently uncertain, we'll instead base our investment case on the FY 2026 dividends. Or trailing yields. Just keep in mind that future yields may be higher or lower depending on a number of company specific and macroeconomic factors.
As for FY 2026, CBA paid a fully franked interim dividend of $2.35 a share on 30 March.
When the bank released its FY 2026 results on 12 August, it reported a 7% increase in cash net profit after tax (NPAT) to $11 billion.
This saw management declare a fully franked dividend of $2.70 per share.
That brings the total FY 2026 dividends to $5.05 a share, up 4.1% from FY 2025 and representing a new all-time high passive income payout.
And at the recent CBA share price, it sees Australia's biggest bank trading at a fully franked trailing dividend yield of 3.3%.
So, how does the dividend yield from the other big four ASX 200 bank stocks compare?
How do the other ASX 200 bank stocks stack up?
While investors buying CBA shares today will receive materially higher future dividend yields than those who bought the stock in the first weeks of August, CBA's dividend yield still trails its three biggest rivals.
For example, at recent share prices, National Australia Bank Ltd (ASX: NAB) and ANZ Group Holdings Ltd (ASX: ANZ) shares both trade at dividend yields of 4.4%.
And Westpac Banking Corp (ASX: WBC) shares trade on a 4.5% fully franked trailing dividend yield.
What are analysts saying about CBA shares?
Despite the reliable passive income on offer, most analysts recommend steering away from CommBank stock at the moment. Many remain concerned the ASX 200 bank remains overvalued despite the past month's share price retrace.
Earlier this week, Shaw and Partners' James Bills issued a sell recommendation on CBA shares (courtesy of The Bull).
According to Bills:
In our view, the stock trades at a significant premium to domestic peers and on historical valuations.
While the bank maintains a high-quality franchise and strong market position, earnings growth is expected to remain modest amid competitive lending conditions and regulatory pressures.
Recent Federal government initiatives aimed at increasing housing supply and improving affordability is likely to lead to intensifying competition across the mortgage market and place pressure on lending margins.
Current valuations leave limited scope for further earnings driven upside. Investors may wish to take profits and re-deploy capital into opportunities offering stronger risk-adjusted return potential.
