Commonwealth Bank of Australia (ASX: CBA) shares usually provide shareholders with a solid dividend yield. This decade, it has regularly hiked the passive income payout following the COVID-19 pandemic.
Investors may be looking at the CBA share price as a potential opportunity. At the time of writing, it's down around 16% in the past six months. Lower prices typically mean a better valuation.
Part of the consideration when thinking about an investment for dividends should be the profitability and operational performance.
The ASX bank share's latest report contained solid numbers. Cash net profit grew 7% to $11 billion.
Looking at some of the core drivers of its profit over 12 months, retail transaction accounts grew by 6% to 12.3 million, the home lending balance rose by 7% to $636 billion, business transaction accounts grew 7% to 1.4 million and business lending rose 13% to $180 billion.
However, credit demand has diminished in the last few months following interest rate rises and taxation changes to capital gains and negative gearing.
With all of the above in mind, let's take a look at what dividends owning CBA shares could generate in 2027.
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Commonwealth Bank passive dividend income projection for 2027
We're already a few months into CBA's 2027 financial year, so it won't be too long until we hear about the half-year numbers.
In terms of the potential passive income, analysts are expecting an improvement of the ASX bank share's bottom line in FY27. This could help the business deliver a bigger dividend.
Based on the estimate on CMC Invest, Commonwealth Bank is projected to pay an annual dividend per share of $5.20 in FY27. That would represent a year-over-year increase of 3%.
At the time of writing, that forecast payout translates into a dividend yield of 3.4% excluding franking credits and 4.8% including franking credits.
Is this a good time to invest in CBA shares?
According to CMC Invest, there have been eight analyst ratings in the last three months. All of those ratings from experts were a sell. So, there's a universal view from investment professionals that the Commonwealth Bank share price is overvalued.
How overvalued do those analysts think the ASX bank share is?
A price target tells us where analysts think the share price will go over the next 12 months.
The average price target of those eight analysts is currently $123.08. Therefore, that group of analysts are collectively suggesting the CBA share price could fall by close to 20% over the next year (at the time of writing).
Therefore, it could be wise to look at other ASX share opportunities for returns.
