The hardest part is not the money, it is deciding what that first purchase should actually be.

Reporting season is in full swing, which makes the market feel unusually noisy for a first-time buyer.

However, the principles that have made ASX shares work over decades do not change because a few companies are reporting this month.

What $1,000 actually buys in ASX shares

Most CHESS-sponsored brokers require a minimum first order of $500 per security, which is known as the minimum marketable parcel.

In practice, that means one or two purchases with $1,000.

Individual share prices are important here too.

At around $178 a share, $1,000 buys you five Commonwealth Bank of Australia (ASX: CBA) shares, which is a meaningful stake in one company and no diversification whatsoever.

Concentrating a first investment in a single stock is where a lot of new investors come unstuck.

There is a psychological benefit to starting small, too. A $1,000 position teaches you how you react to a 20% drawdown, and it does so while minimising losses.

One ETF, or a handful of ASX shares?

An exchange-traded fund (ETF) solves the diversification problem in a single trade.

The Vanguard Australian Shares Index ETF (ASX: VAS) tracks the S&P/ASX 300 Index, so one $1,000 purchase gives you exposure to 300 companies.

Its management fee is 0.07% per annum, which is among the lowest on the ASX and works out at 70 cents a year on $1,000.

Alternatively, investors wanting global technology exposure often look at the Betashares Nasdaq 100 ETF (ASX: NDQ).

The ETF holds the 100 largest non-financial companies listed on the Nasdaq, although the fee is higher at 0.48% to reflect the more specialised exposure.

For reference, the local ETF industry closed the financial year at a record $372 billion in funds under management.

Watch the costs

Brokerage is the silent tax on small parcels.

A $10 fee on a $1,000 trade costs you 1% before you own anything, and paying it twice on a buy and a sell leaves you 2% behind.

Some platforms now offer zero or very low brokerage on ASX-listed products, while others charge a flat $5 to $20 per trade.

On a $1,000 starting balance, the difference can be material.

Fees compound in exactly the same way returns do, only against you.

Foolish takeaway

The first $1,000 you put into ASX shares will not make you wealthy.

What it does is start the compounding clock and teach you how you actually behave when prices fall.

Best practice: keep the costs low, avoid putting everything into one company, and plan to add regularly.

A single $1,000 purchase is a start, not a strategy.

Do it again next month, and the month after that, and the compounding takes care of the rest.

The post How to start investing in ASX shares with $1,000 appeared first on The Motley Fool Australia.

So far in August, the ASX bank shares have been relatively flat. At the time of writing, the shares are $177.90 each.

Thanks to a strong start to the year, the bank's shares are up around 10% year to date and 2% higher than 12 months ago.

For context, the S&P/ASX 200 Index (ASX: XJO) is up around 3% year to date and roughly 4% higher than 12 months ago.

Now the question is, what's ahead for CBA shares over the next month?

Should investors buy CBA shares in August? Or is it time to sell up?

Here's what the experts think

Brokers are pretty pessimistic about the outlook for CBA shares over the next 12 months. 

Market Index data shows that all brokers have a sell rating on the banking giant's shares. The average $125.25 target price implies a potential 30% downside, at the time of writing.

Sentiment is similar on TradingView. Out of 16 analysts, 14 have a sell or strong sell rating on the shares. Another two rate the bank stock as a hold.

They all agree that a downside is ahead, however. The average $125.97 target price implies a potential 30% downside ahead. But some think the share price could fall by up to 50%, to just $90 a share.

The team at Macquarie recently said that while CBA's elevated valuation leaves it most exposed to the housing downturn, they expect its earnings to be the most resilient of the major banks.

The broker has an underperform rating on the stock and a $111 price target. But Macquarie said the bank might surprise on the upside with its second-half results. Although they expect its dividend to be increased by just 5 cents to $2.65, given the challenging macro outlook.

Morgans also reiterated its sell rating on CBA shares late last month and reduced its 12-month price target to $117.63. The broker said that stretched valuation metrics remain implied in the share price.

Up or down: What could influence CBA shares this month?

Reporting season begins this week, and the market has a close eye on CBA shares. CBA will release its full-year results and final dividend on 12 August. The final CBA dividend goes ex on 19 August, with payment due on or around 29 September.

Investors are eager to find out CBA's FY26 margin and the size of the final dividend. The result is expected to influence the direction of CBA shares over the next month, or longer.

The bank is forecast to pay a total dividend of $5.15 per share to shareholders in FY26. 

So, are CBA shares a buy for passive income?

Potentially, yes.

CBA is huge in scale. The bank sits in second place on the ASX 200 in terms of market capitalisation.

CBA is primarily a cyclical stock, but it has strong defensive qualities. Its sheer scale often means investors generally consider it a safe haven when markets are unstable. 

As a result, its operational performance and earnings are mostly strong and consistent, even when markets are weaker.

The latest update from the bank was for the three months to 31 March 2026. It reported statutory net profit of $2.6 billion, while cash net profit was $2.7 billion – this was up 4% year on year, but down 1% on the quarterly average of the FY26 first half.

CBA's huge scale and consistent operational performance mean the bank has maintained a long record of paying regular, fully-franked dividends every year, dating back to 1992. 

As I mentioned above, the bank is forecast to pay a total dividend of $5.15 per share to shareholders in FY26. It is then expected to pay around $5.45 per share in FY27.

At the time of writing, this translates to a forward dividend yield of around 2.9% for FY26. For FY27, the forward dividend yield is about 3%.

The post Should I invest $5,000 in CBA shares in August? appeared first on The Motley Fool Australia.

No dividend is guaranteed of course, but the bank has been very consistent in its payouts.

Banking stocks can deliver consistent earnings because borrowers make monthly repayments. Plus, repaying a loan is usually extremely high on the priority list for both households and businesses, so their earnings are fairly defensive.

While ANZ's dividend has been consistent, there hasn't historically been much growth. Let's see what analysts think could happen if someone were to invest $10,000 in ANZ shares, starting with the dividend projections.

FY27 potential payout

According to the forecast on Commsec, the business could deliver a stable annual dividend payout of $1.66 per share in the 2026 financial year.

But, we're here to talk about the 2027 financial year. Using the projection on Commsec, the ASX bank share is forecast to pay an annual dividend per share of $1.66 in FY27, too.

At the time of writing, that translates into a forward dividend yield of 4.4%, excluding franking credits, or 5.7% including franking credits.

That's not the biggest dividend yield on the ASX, though it's superior to what's on offer to Commonwealth Bank of Australia (ASX: CBA).

What would a $10,000 investment in ANZ shares do?

If someone were to invest $10,000 in ANZ shares, they would be able to buy 268 ANZ shares (with a little bit of money left over), at the time of writing.

With those 268 ANZ shares, investors could receive $444.88 of cash and some franking credits. The level of franking credits are not known at this stage because the ASX bank share is only paying partially franked dividends.

Is this a good time to invest in the ASX bank share?

According to CMC Invest, there have been six analyst ratings on ANZ shares in the last three months. Of those six ratings, just two were buy ratings, and four were hold ratings.

Of those six analyst ratings, the average price target is $35.44. This suggests the analysts are collectively expecting a potential 5% decline over the next 12 months.

So, the passive income may be offset by share price declines. Therefore, there could be better places on the ASX share market to invest than ANZ shares.

The post If I invest $10,000 in ANZ shares, how much passive income will I receive in 2027? appeared first on The Motley Fool Australia.

The Reserve Bank of Australia hands down its next decision at 2:30pm on 11 August, and the day after that, Commonwealth Bank of Australia (ASX: CBA) opens the sector's full-year results season.

Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and ANZ Group Holdings Ltd (ASX: ANZ) all run September year ends, which makes the RBA call the first real catalyst for ASX bank shares of the period.

What the RBA decision could mean for ASX bank shares

The cash rate currently sits at 4.35%, following three increases through 2026 that not many people were forecasting a year ago.

In its latest move, the Reserve Bank left the rate on hold in June while it assessed the response to those earlier rises. Most economists expect the same again.

CommBank's own economics team expects the cash rate to remain at 4.35% through 2026 and does not forecast cuts until 2027.

A hold would be the path of least resistance for the sector. It removes near-term uncertainty without adding fresh pressure to household budgets, which is exactly what a lender wants heading into results.

There is also a second date worth marking beyond the RBA meeting itself.

CBA will release its FY26 result and final dividend on 12 August, with the shares scheduled to trade ex-dividend on 19 August and payment due on or about 29 September.

Why higher rates don't automatically help ASX bank shares

There is a common assumption that rate rises are unambiguously good for the banks.

The reality is messier. Higher rates do lift the return banks earn on deposits they hold at low or zero interest.

But savers respond by shifting money into term deposits and high-interest accounts, and that behaviour claws back much of the initial benefit.

The margin data from the latest half-year results bears this out. NAB's net interest margin rose three basis points to 1.81% over the half, whilst Westpac's fell three basis points to 1.89% on the same basis.

ANZ reported a group margin of 1.53% across the half. Management has flagged a bias to the upside in margins (excluding Markets) next period.

The bigger risk is as follows.

Westpac carries the heaviest mortgage exposure of the four, with roughly 69% of its loan book in residential lending.

Higher rates eventually feed through to arrears, and the full effect of this year's tightening has not yet arrived.

What brokers are saying

Analysts are unusually divided on the sector right now.

Morgan Stanley holds sell ratings on CBA, NAB and Westpac shares, and its CBA target of $125 implied around 26% downside when the note landed in July.

Jefferies is similarly cautious, with a sell rating and a $144.40 target on the same stock.

Broader consensus data has also shown sell or hold ratings dominating across the majors for much of the year.

Not everyone is bearish, though.

Citi has a buy rating and a $39.25 price target on ANZ, which has been the analyst favourite among the majors for much of 2026.

Australian banks also remain exceptionally well capitalised by global standards, and their fully franked dividends continue to appeal to income investors in lower tax brackets.

None of those arguments require earnings to accelerate, which is a large part of their appeal to conservative investors.

Foolish takeaway

The 11 August decision matters less for what it does to margins next quarter, and far more for what it signals about the path into 2027.

A hold, followed by a solid CBA result on 12 August, would validate the bulls.

Another hike would sharpen the credit quality debate that the bears have been pressing all year.

Long-term investors in ASX bank shares should watch the arrears line as closely as the cash rate itself, because that is where this cycle will ultimately be decided.

The post The RBA meets on 11 August. What could this mean for ASX bank shares? appeared first on The Motley Fool Australia.

Starting with the weakest outperformer, ANZ Group Holdings Ltd (ASX: ANZ) shares closed on 30 June trading for $35.35. When the closing bell sounded on 31 July, shares were changing hands for $37.31 apiece.

That saw this ASX 200 bank stock up 5.5% over the month just past.

Commonwealth Bank of Australia (ASX: CBA) shares also enjoyed a strong July.

CBA shares closed out June trading for $164.62 each and finished off July at $177.53. That put the CBA share price up 7.8% for the month.

Turning to Westpac Banking Corp (ASX: WBC), Westpac shares closed June at $35.21 and closed July trading for $37.87, putting the Westpac share price up 7.6%.

And the best performer among the big four Aussie banks in July was National Australia Bank Ltd (ASX: NAB).

On 30 June, NAB shares closed the day trading for $37.86. On 31 July, shares closed at $41.33 apiece. This saw the NAB share price up an impressive 9.2% in July.

Why did the ASX 200 bank stocks outperform in July?

There was no major price-sensitive news released from any of the big four Aussie banks in the month just gone.

However, ASX 200 bank stocks look to have caught some macroeconomic tailwinds.

First, they enjoyed a collective boost over the month amid ongoing global market uncertainty, which drove a broader investor rotation into quality, defensive shares.

The banks will also have benefited from increased expectations that interest rates may have topped out. That could drive both a revival in loan demand and lower bad debts over the months ahead.

ANZ completes acquisition as CBA narrows gap with BHP

ANZ did catch headlines on 31 July, after the ASX 200 bank stock announced it had completed its acquisition of merchant payments business Worldline Australia Pty Ltd.

The ASX 200 bank stock had previously reported that it had agreed to acquire Worldline S.A's 51% share in the business for an enterprise value of $89 million (on a 51% basis).

Management noted, "The acquisition aligns to the ANZ 2030 strategy, strengthening our direct relationship with our customers and reinforcing the bank's position as the transactional bank of choice."

CBA also caught investor attention in the latter week of July, as the bank's outperformance saw it narrow the gap with BHP Group Ltd (ASX: BHP) for the biggest ASX stock crown.

On 27 July, CBA had a market cap of around $292.9 billion, or just $12.2 billion shy of BHP's $305.1 billion valuation.

The post Why ASX 200 bank stocks including CBA and NAB shares smashed the benchmark in July appeared first on The Motley Fool Australia.

Three of the big four carry sell ratings from at least one major broker.

The fourth has a buy rating and a premium price target compared to its current price.

With Commonwealth Bank of Australia (ASX: CBA) reporting on 12 August, the debate about the sector's potential is only going to get more heated.

The bear case against ASX bank shares

The bears are not questioning the quality of these businesses. They are more so questioning the price.

Morgan Stanley has sell ratings on CBA, National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC).

The broker's CBA target of $125 implied around 26% downside when the note landed in July.

Its NAB and Westpac targets of $34.50 and $31.50 implied 13% to 14% downside.

Jefferies is similarly cautious, holding a sell rating and a $144.40 target on CBA.

The bears all have roughly the same argument

CBA trades on the richest earnings multiple of any major Australian bank, in a market that is both mature and intensely competitive.

Westpac carries the heaviest mortgage exposure of the four, with roughly 69% of its loan book in residential lending.

With the cash rate at 4.35% following three increases through 2026, that risk has heightened.

Higher rates eventually feed through to arrears, and the full effect of this year's tightening has not arrived yet.

The wider point is that these are mature businesses in a mature market, and paying a premium multiple for low single-digit earnings growth leaves very little margin for error.

The bull case for ASX bank shares

Not everyone is bearish on ASX bank shares.

Citi has a buy rating and a $39.25 price target on ANZ Group Holdings Ltd (ASX: ANZ).

That implied roughly 9% upside when the note was published.

ANZ has been the analyst favourite among the majors for much of 2026.

The bank has confirmed it achieved 49% of its $800 million gross cost-savings target for FY26, cost discipline being one of the few levers available when revenue growth is hard to find.

The wider bull case rests on three things.

Australian banks remain exceptionally well capitalised by global standards.

Their fully franked dividends still appeal to income investors, particularly those in lower tax brackets.

And a higher cash rate, while a credit risk over time, also supports net interest margins in the near term.

None of those arguments require earnings to accelerate, which is a large part of their appeal to conservative investors.

What to watch in August

CBA will release its FY26 result and final dividend on 12 August. Its shares are scheduled to trade ex-dividend on 19 August, with payment on or about 29 September.

Bank results rarely surprise on revenue, so the interesting detail will likely be buried in the provisioning and expense lines.

Margins, cost growth and any commentary on credit quality may matter more than the headline profit figure.

Foolish takeaway

The split among brokers is really a disagreement about valuation, not about business quality.

Nobody disputes that these companies are profitable, well-run, systemically important institutions. The argument is more so whether current prices leave any room for something to go wrong.

For income investors already holding ASX bank shares, franked dividends remain a key attraction.

But for anyone considering fresh capital, the bear case deserves serious consideration.

August results will give both camps a great deal more to work with.

The post Brokers are split on the big four ASX bank shares. Here's the case for and against appeared first on The Motley Fool Australia.

Hundreds of companies will report between now and the end of the month, as our full calendar shows.

Most investors do not need to follow all of them, but a handful of results carry enough weight to move the index and set the tone for entire sectors.

Here are five worth circling.

Why this ASX reporting season matters

FY26 was a strange year for the Australian market.

The S&P/ASX 200 Index (ASX: XJO) delivered total returns of 7%, with capital growth of just 2.77%.

Almost all of that came from one place.

The materials sector soared 47.48% for a total return of 52.11%, its strongest year since 2006.

Everything else lagged badly.

This ASX reporting season will show whether those sector dynamics may continue into the year ahead.

Five ASX reporting season results to watch

1. Commonwealth Bank — 12 August

Commonwealth Bank of Australia (ASX: CBA) will announce its FY26 result and final dividend on 12 August.

Its third-quarter update showed cash profit of roughly $2.7 billion, up 4% year-on-year.

That figure was 1% below the quarterly average of the first half. Investors will be on the lookout to see if CBA can recapture some of its previous earnings momentum. Given the size of the company, CBA will provide an early indication of the overall health of the Australian banking sector.

Shares are scheduled to trade ex-dividend on 19 August.

2. Rio Tinto — already reported

Rio Tinto Ltd (ASX: RIO) has already provided some relief to ASX investors. The mining giant reported on 29 July and set the benchmark for the season, with underlying EBITDA rising 28% to US$14.8 billion.

The interim dividend jumped 43% to 211 US cents per share.

Copper EBITDA surged 84% to US$5.7 billion.

Rio Tinto shares go ex-dividend on 13 August, with payment on 24 September.

3. BHP Group — 17 August

BHP Group Ltd (ASX: BHP) rose 62% in FY26 to finish at $59.40 on 30 June.

Its June quarter operational review carried a warning, with FY27 copper production guided to 1,650 to 1,800 kilotonnes.

That compares with 1,953 kilotonnes across FY26, largely reflecting falling grades at Escondida.

Investors will be looking to validate the bull case behind BHP shares. This will also be the first full-year result under a new chief executive.

4. CSL — 18 August

CSL Ltd (ASX: CSL) reports on 18 August.

The company has guided to FY26 revenue of around US$15.2 billion and NPATA of approximately US$3.1 billion.

CSL has also flagged roughly US$5 billion of additional non-cash impairments across FY26 and FY27.

Half-year NPATA came in at US$1.923 billion, leaving about US$1.177 billion required in the second half.

Any update, whether positive or negative, on the deferred Seqirus demerger will move the stock significantly.

5. Northern Star Resources — 20 August

Northern Star Resources Ltd (ASX: NST) sold 1.543 million ounces of gold across FY26.

All-in sustaining costs of $2,698 per ounce landed within guidance.

Audited results and FY27 guidance both arrive on 20 August.

The company deferred that guidance while it assesses early performance from the KCGM mill expansion.

Foolish takeaway

This ASX reporting season will reward preparation far more than reaction.

The share price move on the day usually depends less on the reported numbers than on what management says about the year ahead.

Rio Tinto has already shown what a beat looks like this cycle. Whether the banks, the healthcare names and the gold miners can match it remains the open question.

Set a reminder for the dates that matter to your holdings, and read the outlook statements rather than just the headline profit.

The post Your August ASX reporting season calendar: 5 results that matter most appeared first on The Motley Fool Australia.

The banking giant is a cyclical stock, but it has strong defensive qualities. 

Scarcity of quality stocks on the ASX also means investors tend to put major players, like CBA, on a pedestal. The bank's sheer size and market dominance means investors generally consider it a safe haven, even when markets are choppy. 

We've seen this play out throughout 2026 so far. 

Regardless of the business fundamentals and analyst outlooks, many investors buy into CBA purely because it is Australia's largest bank.

After all, the banking giant is the largest ASX bank on the Australian sharemarket, and the second-largest ASX 200 stock behind BHP Group Ltd (ASX: BHP) by market capitalisation.

The ASX bank shares are also trading close to an all time high, at the time of writing.

That's one of the benefits of cyclical stocks. They tend to outperform during economic recoveries.

Another benefit of CBA shares is that its huge scale and operational performance mean it can pay shareholders a regular passive income.

But what exactly does that passive income look like?

Let's take a look.

How many CBA shares can I get for $10,000?

At the time of writing, CBA shares are trading at $178.66 each. That means a $10,000 investment will buy you around 56 shares.

What dividend does CBA pay its shareholders?

CBA has a long history of paying regular fully-franked dividends dating back to 1992. These are typically paid out every six months, in March and September.

The bank most recently paid its shareholders a fully-franked interim dividend of $2.35 per share in late-March.

Looking ahead, the bank is forecast to pay a total dividend of $5.15 per share to shareholders in FY26. It is then expected to pay around $5.45 per share in FY27.

At the time of writing, this translates to a forward dividend yield of around 2.9% for FY26. For FY27, the forward dividend yield is about 3%.

So, what's the estimated passive income off of a $10,000 investment for FY27?

Using the estimated dividend payout figures above, we can calculate roughly how much passive income investors can expect from a $10,000 investment in CBA shares.

If the banking giant pays the expected $5.15 per-share dividend in FY26, your 56 shares would generate around $288 in passive income.

Assuming CBA then pays the forecasted $5.45 dividend in FY27, those 56 shares would generate around another $305 in passive income for the year.

The post If I invest $10,000 in CBA shares, how much passive income will I receive in 2027? appeared first on The Motley Fool Australia.

That's what makes the following ASX dividend stocks stand out. They combine reliable businesses with long track records of growing shareholder income, making them worth a closer look for investors seeking rising passive income.

APA Group (ASX: APA)

Among Australia's leading ASX dividend stocks, APA Group has built an enviable reputation for income investors.

The company owns critical energy infrastructure, including gas pipelines, electricity transmission assets, and renewable energy connections. Much of its revenue is backed by long-term contracts, creating stable cash flows that support regular distributions.

APA has increased its annual distribution every year since 2004, an impressive record spanning more than two decades. Management expects to pay a FY26 distribution of 58 cents per security, while Bell Potter forecasts this will rise to 59 cents in FY27. Based on the current share price, that implies a forward yield of around 5.6%.

Although APA carries significant debt and faces the long-term energy transition, its growing investment in electricity and renewable infrastructure could help support future distribution growth.

Argo Investments Ltd (ASX: ARG)

Investors looking for diversified ASX dividend stocks should also consider Argo Investments.

Rather than operating a single business, Argo owns a broad portfolio of leading Australian companies, including Commonwealth Bank of Australia (ASX:CBA), BHP Group Ltd (ASX: BHP), and Rio Tinto Ltd (ASX: RIO). That diversification helps smooth returns while reducing company-specific risk.

Argo has paid dividends every year since 1946 and has delivered fully franked dividends since 1995.

The company recently lifted its interim dividend by 8.8% to 18.5 cents per share. Combined with its previous payment, shareholders have received 38.5 cents per share over the past year, equating to a grossed-up yield of roughly 4.3%, including franking credits.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Few ASX dividend stocks can match Washington H. Soul Pattinson's remarkable consistency.

The diversified investment company has increased its annual dividend every year since 1998, putting it within reach of three decades of consecutive dividend growth.

Its portfolio spans resources, energy, telecommunications, agriculture, financial services, industrial property, and many other sectors. That diversification allows Soul Patts to generate cash flow from multiple sources while reducing reliance on any single industry.

Importantly, management reinvests part of its earnings rather than distributing every available dollar. That disciplined approach has helped grow both the business and its dividends over time.

Based on its two most recent payments, the ASX dividend stock offers a grossed-up yield of around 3.4%, including franking credits. While the yield isn't the highest on the market, its long history of increasing dividends may prove even more valuable for long-term investors.

Foolish takeaway

The best ASX dividend stocks don't simply offer attractive yields today. They keep rewarding shareholders year after year.

Companies with durable businesses, dependable cash flow, and a commitment to growing dividends can help investors build an income stream that keeps rising long after the initial investment.

The post Want a pay rise? These ASX dividend stocks could deliver one appeared first on The Motley Fool Australia.

A huge dividend payout might look attractive today, but the best income portfolios are built around high-quality businesses that can keep paying — and ideally growing — dividends through different economic conditions.

The goal is simple: create an income stream that can last for decades without relying on a handful of risky, high-yield stocks.

Start with reliable cash flow

The foundation of any strong ASX dividend portfolio is dependable cash flow.

Take Coles Group Ltd (ASX: COL). Supermarkets may not be the most exciting businesses, but they are among the most resilient.

Australians still need groceries, household products, and everyday essentials whether the economy is strong or weak.

Coles faces challenges, including intense competition, rising costs, and changing consumer behaviour. However, its defensive business model and steady customer demand provide the type of earnings stability that dividend investors value.

Add essential services

A long-lasting dividend portfolio should also include businesses that provide services people rely on every day.

Telstra Group Ltd (ASX: TLS) is a classic example. Australians depend on telecommunications networks for work, entertainment, banking, shopping, and staying connected. That ongoing demand helps support relatively predictable revenue.

Telstra still needs to invest heavily in maintaining and upgrading its network, while competition remains fierce across the industry. However, its essential role in the economy gives it a strong foundation for returning cash to shareholders.

Diversify your income streams

One common mistake dividend investors make is concentrating too heavily on a single sector. An ASX dividend portfolio packed with banks or miners may perform well during certain periods, but it can leave investors vulnerable when conditions change.

That is why diversification matters.

Transurban Group Ltd (ASX: TCL) is one example of an infrastructure business that can add another source of income. The company operates major toll roads across Australia and North America, with long-term assets that generate recurring cash flows.

Property can also play a role.

HomeCo Daily Needs REIT (ASX: HDN) provides exposure to neighbourhood shopping centres anchored by supermarkets, healthcare providers, and other essential retailers. Long leases can provide greater visibility over rental income, although investors still need to monitor interest rates, debt levels, and tenant quality.

Don't forget dividend growth

A high dividend yield today does not guarantee a higher income tomorrow. The strongest ASX dividend portfolios also include businesses capable of growing earnings over time.

Commonwealth Bank of Australia (ASX: CBA) has historically rewarded shareholders through a combination of dividends and long-term capital growth. While banks remain exposed to economic cycles, CBA's scale, strong balance sheet, and market position have helped it remain one of Australia's most closely followed income stocks.

Wesfarmers Ltd (ASX: WES) is another company worth considering. Its dividend yield is not usually among the highest on the ASX, but focusing only on yield can miss the bigger picture. Wesfarmers has built value by reinvesting in its businesses, improving operations, and allocating capital towards attractive growth opportunities.

Over time, that approach has helped support rising earnings and a growing dividend.

The post How to build an ASX dividend portfolio that pays you for life appeared first on The Motley Fool Australia.

Many Aussies think that they need to invest millions of dollars to make it worth it. But those with more experience know that you can earn a good passive income off any-sized portfolio if it's invested wisely.

But how much dividends could you actually earn?

Let's break it down, using a $400,000 portfolio as an example.

How much could I earn off a $400,000 ASX share portfolio?

To calculate your passive income, you need to multiply your total portfolio value by your dividend yield.

The tricky part is that the answer varies widely depending on your portfolio's dividend yield.

For example, $400,000 x 3% = $12,000 per year in dividend payments.

But if you double your portfolio yield to around 6%, your passive income will be double the size too. That's because $400,000 x 6% = $24,000 per year in dividend payments. 

That's some decent passive income!

Then, as your dividend yield increases, the passive income you can earn from your $400,000 portfolio also increases.  

These figures are based on cash dividends before any tax or franking credits.

Of course, this type of money isn't going to become a primary income stream, but it'll certainly help turbocharge your wealth.

Which ASX shares could earn me $12,000 per year in dividends?

To earn an annual passive income of around $12,000, your portfolio will need to yield around 3%.

A 3% dividend yield is very achievable, and there is a huge range of high-quality ASX dividend shares that pay out around that level. 

Macquarie Group Ltd (ASX: MQG), Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP) are all stable ASX shares that yield around 3%.

What ASX shares could help me earn around $24,000 per year in dividend payments?

To earn an annual passive income of around $24,000, your portfolio will need to yield around 6%.

This is slightly higher than the index average, but there are still plenty of options available.

I'd look at ASX shares like Origin Energy Ltd (ASX: ORG), Graincorp Ltd (ASX: GNC), or Harvey Norman Holdings Ltd (ASX: HVN), which all yield around this level.

What about if I wanted to earn $28,000 per year in dividends, or even more? Is that possible?

Yes, it's possible, although your portfolio would need to average a dividend yield of 7% or higher.

There are options around this level, but remember, the higher the yield, the more risk those ASX shares have.

For ASX shares yielding around 7%, I'd look at Orora Ltd (ASX: ORA), Atlas Arteria Ltd (ASX: ALX), and Dexus Industria REIT (ASX: DXI). Abacus Group (ASX: ABG) pays a little higher, closer to 9%.

Of course, it's important to note that, ideally, you want to build a portfolio comprising a mix of different yielding shares for diversification, rather than a portfolio of just one stock.

The post How much could a $400,000 ASX share portfolio pay in dividends? appeared first on The Motley Fool Australia.

It sounds modest enough on the surface, but annualised, the total amount comes to $6,000.

To reach that goal, many investors look at ASX blue-chip shares with high dividend yields. Two of the most widely held income names on the market are Commonwealth Bank of Australia (ASX: CBA) and Telstra Group Ltd (ASX: TLS).

Let's run the numbers on both.

The passive income maths on CBA shares

CBA shares are changing hands at around $178 at the time of writing.

Analyst forecasts compiled by CommSec point to an annual dividend of $5.15 per share in FY27, fully franked.

That works out to a cash yield of roughly 2.9%.

To collect $6,000 of cash dividends, you would need about 1,165 CBA shares.

At the current price, that is an outlay of roughly $208,300.

However, franking changes everything.

A fully-franked $5.15 dividend carries about $2.21 of franking credits at the 30% company tax rate, lifting the grossed-up figure to roughly $7.36 per share.

On that basis, 816 shares, or an investment of about $145,900, would deliver $6,000 of grossed-up income.

Whether those credits are useful to you will depend on your marginal tax rate.

What Telstra shares could deliver

Telstra shares are trading at around $5.07 at the time of writing.

Analysts expect a 21-cent annual dividend for FY26, franked at roughly 90%.

That is a cash yield of about 4.1%, comfortably ahead of CBA.

You would need roughly 28,570 Telstra shares to bank $6,000 in cash, costing about $144,900.

Counting franking credits of around 8.1 cents per share, the grossed-up requirement drops to about 20,590 shares, or roughly $104,400.

How the latest earnings stack up

However, when buying ASX shares for income, investors should also look at how the underlying companies are performing.

CBA delivered a steady first-half result for FY26 in February.

Cash net profit after tax rose 6% to $5.45 billion.

Net interest margin held at 2.04% on an underlying basis, and return on equity edged up 10 basis points to 13.8%. The interim dividend increased 4% to $2.35 per share, fully franked.

CBA's full-year result lands on 12 August.

Telstra's half was arguably the stronger of the two.

EBITDA rose 4.9% to $4.2 billion, net profit climbed 8.1% to $1.2 billion, and mobile services revenue grew 5.6%.

Telstra lifted its interim dividend 10.5% to 10.5 cents per share, and its on-market buyback program was expanded to up to $1.25 billion.

Blending both for passive income

For investors looking for diversification, a 50/50 split changes the arithmetic again.

Taking $3,000 of cash dividends from each would require roughly 583 CBA shares and 14,286 Telstra shares.

That is a combined investment of about $176,700, cheaper than CBA alone but dearer than Telstra alone.

The trade-off here is fairly straightforward, and it comes down to what you value more in an income holding.

Telstra offers the higher starting yield and faster dividend growth, while CBA offers full franking and a longer record of payout stability.

Foolish Takeaway

Neither of these businesses will hand you $500 a month cheaply.

Even the more generous Telstra yield demands close to $145,000 before franking credits are counted.

For most investors, the realistic path is accumulating the position over years rather than buying it in one hit.

Reinvested dividends do a lot of the heavy lifting across a decade, and a portfolio spread across more than two names will allow you to sleep better.

The post Chasing $500 a month in passive income? Here's how appeared first on The Motley Fool Australia.

No dividend is guaranteed, of course, but over the last 15 to 20 years, I'd say CBA has been the most consistent and resilient of the ASX bank shares, certainly more than Westpac Banking Corp (ASX: WBC), ANZ Group Holdings Ltd (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB).

Let's take a look at what could happen if someone were to invest $20,000 in CBA shares.

Potential payout in FY27

Considering we're now in the 2027 financial year, I'm going to focus on the bank's possible FY27 payout.

The business has regularly increased its dividend payout over the past decade and it's expected to increase the dividend payout again in the 2027 financial year by 1% compared to the estimate for the 2026 financial year.

According to the projections on Commsec, the business could pay an annual dividend per share of $5.10 in FY26 and then $5.15 in FY27.

At the time of writing, that translates into a potential FY27 grossed-up dividend yield of 4.1% including franking credits, or a 2.9% yield excluding the franking credits.

What passive income would a $20,000 investment create?

As I've mentioned, no dividend payment is guaranteed. The real passive income for owners of CBA shares could be more, or it could be less.

A $20,000 investment could mean buying 112 CBA shares, with a little bit of change remaining.

Assuming Commonwealth Bank does pay $5.15 per share in FY27, it would generate $576.80 of dividend cash and approximately $247.20 of franking credits, for an overall total of $824 of passive income.

Are CBA shares a good idea?

Commonwealth Bank has been a pillar of stability over many years, but that doesn't necessarily mean the ASX bank share is going to deliver strong shareholder returns from here.

NAB recently revealed that its home lending applications were down 15% in the three months to June 2026 compared with the three months to March 2026. I wouldn't be surprised if CBA's home lending applications were also down in the last few months following the proposed federal property taxation changes.

According to CMC Invest, there have been seven broker analyst ratings on the business in the last three months, with all seven of those ratings being a sell. The average price target on the CBA share price is $122.36, suggesting a possible decline of around 30% over the next year.

Whether a 30% decline happens or not remains to be seen, but the analysts do seem to be suggesting that the decline could outweigh the passive income. Therefore, other ASX share opportunities could be better choices than CBA right now.

The post $20,000 of CBA shares can net me this much passive income! appeared first on The Motley Fool Australia.

It could cover everyday expenses, make retirement more comfortable, or provide the freedom to spend less time working.

Very few people will begin with enough money to generate that income straight away. I think the more realistic path is to build wealth first, give compounding time to work, and gradually turn that capital into a dependable income stream.

Here are three ways I would approach it.

Build capital from scratch

For investors starting with little or no money invested, I would initially focus on growing the value of the portfolio.

Regular contributions could be directed towards quality blue-chip shares and businesses capable of increasing earnings over many years.

Commonwealth Bank of Australia (ASX: CBA) could provide exposure to a leading bank with a strong deposit franchise, digital capabilities, and fully franked dividends.

Macquarie Group Ltd (ASX: MQG) could add long-term growth through its global operations across asset management, infrastructure, commodities, banking, and investment markets.

I would also consider healthcare companies such as ResMed Inc. (ASX: RMD), which has recurring demand for masks, accessories, and software alongside sales of sleep apnoea devices.

The early dividends could be reinvested to buy more shares, while regular contributions continue increasing the portfolio balance.

I think the main priority at this stage should be total return rather than chasing the highest income. Once the portfolio becomes large enough, some growth holdings could be retained while new money is gradually directed towards stronger dividend payers.

Focus on dependable dividend growth

If I already had a sizeable amount ready to invest, I would be drawn to established companies with dependable dividends and a good chance of increasing those payments over time.

A portfolio worth around $1.25 million with an average dividend yield of 4% could generate approximately $50,000 per year before tax.

CBA could again have a place in this approach, although its starting yield may be lower than other income shares.

Woolworths Group Ltd (ASX: WOW) could provide relatively defensive earnings because grocery demand continues through changing economic conditions. Its dividends may also grow if sales, margins, and cash generation improve over time.

I think accepting a lower starting yield can make sense when the underlying businesses are financially strong and capable of producing a larger income stream in future years.

Seek a higher starting income

A portfolio worth around $1 million and yielding 5% could also produce $50,000 annually.

National Australia Bank Ltd (ASX: NAB) could contribute fully franked dividends supported by its banking operations and leading position in business banking.

Telstra Group Ltd (ASX: TLS) may provide steadier demand because mobile and internet services remain part of everyday life for households and businesses.

APA Group (ASX: APA) could add income from energy infrastructure assets, while selected real estate investment trusts may offer another source of distributions.

I would still avoid choosing shares only because their yields look high. A large payout provides little comfort if earnings weaken and the dividend is later reduced.

The balance sheet, cash generation, and outlook for future payouts would guide my decisions.

Foolish takeaway

I think building a $50,000 passive income will look different depending on where an investor begins.

Someone starting from scratch may spend years concentrating on capital growth, regular contributions, and reinvested dividends before shifting towards income.

Investors with more capital already available may be able to focus immediately on dependable dividend shares or pursue a somewhat higher starting yield.

Whichever path is chosen, I think patience and dividend quality should be more important than reaching the goal as quickly as possible.

The post 3 simple ways to build a $50,000 passive income from ASX shares appeared first on The Motley Fool Australia.

With CBA's huge size and slower growth prospects, its dividend may not grow as much as it used to. The tax changes to negative gearing and capital gains may slow credit growth. Plus, it's harder to grow a business at a good pace when it's already so large.

However, despite the above headwinds, the CBA share price still trades at a relatively high price-to-earnings (P/E) ratio – which reduces the dividend yield.

For example, according to Commsec's projections, the ASX dividend share is expected to pay an annual dividend per share of $5.10. That translates into a grossed-up dividend yield of 4.2%, including franking credits. The payout is then only expected to rise 1% in FY27.

I think the two ASX dividend share names below are more compelling for long-term passive income, while still providing exposure to 'blue-chip' strength.

Medibank Private Ltd (ASX: MPL)

Medibank Private is the largest private health insurance business with the Medibank and ahm brands.

In terms of dividends, since it first started paying in 2015, it has increased its payout every year except 2020, which was impacted by COVID. That's a great track record of dividend growth.

But, the ASX dividend share is expected to have a much larger dividend yield than what's on offer from CBA shares.

Medibank is estimated to pay an annual dividend per share of 19.6 cents for FY26. That translates into a grossed-up dividend yield (including franking credits) of 5.5% – significantly more than CBA.

On top of a stronger starting yield, the payout is forecast to increase at a stronger rate in FY27, further expanding the yield gap. The dividend is projected to increase by 12.2% in FY27 to 22 cents per share. That works out to be a potential grossed-up dividend yield of 6.1%, including franking credits.

With tailwinds like an ageing population and expansion (via acquisition) into providing healthcare services – not just health insurance – it could continue to grow its earnings (and passive income) at a solid pace for the foreseeable future.

Charter Hall Long WALE REIT (ASX: CLW)

Another ASX dividend share that can provide investors with blue-chip exposure is this real estate investment trust (REIT).

It's a large business itself, with a property portfolio worth around $6 billion. On top of that, 99% of its properties are leased to blue-chip tenants such as Australian government entities, BP, Telstra Group Ltd (ASX: TLS), Coles Group Ltd (ASX: COL), Woolworths Group Ltd (ASX: WOW) and Endeavour Group Ltd (ASX: EDV).

The business is invested in a variety of areas including data centres, social infrastructure, office, industrial and logistics, and consumer-facing buildings (such as service stations and hotels/pubs).

I like how the business has rental growth built into its contracts, with either fixed increases or rises linked to inflation.

The business trades at a large discount to its underlying value, as measured by the net tangible assets (NTA) of $4.68 at 31 December 2025. This big discount means it can offer a large dividend yield.

It grew its FY26 distribution by 2% to 25.5 cents, which translates into a distribution yield of 6.8%. I expect a similar payout in FY27, so the passive income yield could be very large compared to what CBA shares offer.

The post Forget CBA shares! Buy these ASX dividend shares instead for passive income appeared first on The Motley Fool Australia.

Overall, ASX 200 bank shares have climbed over the past month, though they have yet to rebound to the bumper levels seen earlier this year. 

Slower economic growth, moderating inflation data, and expectations of interest rate cuts later in the year have all helped improve investor sentiment.

Other sectors, such as industrials, materials, and utilities, have tumbled lower, while weaker commodity prices have also pulled down the gold and mining sector. 

The shift saw an increase in investors rotating into more defensive, income-generating sectors such as financials.

However, concerns about overinflated prices, mortgage competition, and slowing credit growth kept share price growth subdued.

What happened to the ASX 200 big four major banks in July?

Australia's banking sector is dominated by the big four banks: Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB), and ANZ Group Holdings Ltd (ASX: ANZ).  

Together, they make up around a quarter of the S&P/ASX 200 Index (ASX: XJO) by market capitalisation. 

At the time of writing, with only a couple more days left of the month, CBA shares are up around 0.2% for the day and changing hands at $176.34 a piece. The ASX 200 major bank's shares are also around 8% higher over the past month. 

NAB shares are also trending higher on Tuesday morning, up around 0.2% to $41.01 a piece, at the time of writing. NAB shares have risen around 8% over the past month.

ANZ shares are also up 0.2% for the day so far, at $36.94. Over the past month, the bank stock has also climbed higher, up around 5%.

Meanwhile, Westpac shares have dipped slightly into the red this morning, down around 0.1% to $37.66 a piece. But over the past month, the shares have risen around 7%.

What about the mid-tier banks?

Bendigo and Adelaide Bank Ltd (ASX: BEN) shares are up around 0.5% on Tuesday morning, to $11.06 a piece. Over the month, the shares are also up around 6%.

It's a similar story for Bank of Queensland Ltd (ASX: BOQ) shares. They have climbed around 0.5% in early morning trade, to $6.51 a piece. The ASX bank stock is also up roughly 4% over the month. 

But Macquarie Group Ltd (ASX: MQG) shares have fallen into the red on Tuesday morning, down roughly 1.5% to $254.72. Over the month, the bank was the worst-performing ASX bank stock, although the shares still climbed by around 2% higher.

Which ASX bank shares are a buy for August?

While Macquarie shares are technically the slowest performer so far this July, brokers are very bullish about the outlook over the next 12 months. TradingView data shows the majority have a buy rating on the investment bank's shares, and the $262.77 average target price implies a potential 3% upside ahead.

Which ones are rated a sell?

Brokers still rate CBA shares as a strong sell. The latest $125.51 target price on TradingView now implies a potential 29% downside ahead for investors, at the time of writing. 

The majority also have a sell rating on Westpac shares. The latest $33.35 average target price now implies a potential 12% downside, according to TradingView data.

BOQ shares are also expected to fall over the next 12 months. Most brokers rate the ASX bank as a sell, and the $60.81 average target price on TradingView now implies a 7% downside ahead.

Which ASX bank shares do brokers rate as a hold?

Then there are the ASX 200 bank shares that analysts are on the fence about.

TradingView data shows brokers are divided between a buy and sell rating on ANZ shares. The $34.91 target price, however, implies a potential 6% downside at the time of writing.

The data also shows that the majority have a hold rating on NAB shares. The average $37.94 target price on the ASX bank stock also implies a potential downside of around 7% at the time of writing.

Bendigo shares are also tipped to fall by around 6% to an average target price of $10.44.

The post Are ASX bank shares a buy in August? appeared first on The Motley Fool Australia.

Macquarie has run the ruler over the banks ahead of the upcoming reporting season, and it's fair to say, from a share price point of view, they're not expecting too many positive surprises.

Broadly, the Macquarie analysts said they were expecting "solid" results for the second half of the year, but there were storm clouds on the horizon.

As they said:

Revenue guidance and commentary are likely to be on the softer side, given the material slowing in lending growth and increase in mortgage competition. We expect this will see a greater focus on cost management in FY27-28. In particular, we will be closely watching for commentary on recent lending application trends and competition, any signs of deteriorating credit quality, and updated costs guidance as banks seek to offset the challenging revenue environment. We maintain our underweight stance on the sector with ANZ and NAB our preferred exposures.

Now let's see what they're saying about each bank.

ANZ Group Holdings Ltd (ASX: ANZ)

Macquarie has a neutral rating on ANZ and said they are more positive than consensus estimates for the bank, driven by its stronger balance sheet.

That said, they saw a downside risk to earnings from higher impairments in the second half.

They added:

Looking further ahead, we forecast 2% and 7% downside risks to pre-provision consensus earnings in FY27E and FY28E, respectively. This is largely driven by weaker margin trends as ANZ competes for both mortgage and deposits and aligns savings rates following SUN integration.

Macquarie has a $32.50 price target on ANZ shares.

Commonwealth Bank of Australia (ASX: CBA)

Macquarie said while CBA's elevated valuation "arguably leaves it most exposed to the housing downturn, we expect its earnings to be the most resilient of the major banks''.

Despite this, they have an underperform rating on the stock and a $111 price target.

Macquarie said the bank might surprise on the upside with its second-half results, but they expected its dividend to be increased by just 5 cents to $2.65, given the challenging macro outlook.

National Australia Bank Ltd (ASX: NAB)

Macquarie has a neutral rating on NAB, saying that, like its peers, there will be headwinds from lower volumes and increased competition.

They added:

While NAB has successfully demonstrated progress in deposit gathering, and strengthening its proprietary channel, the weaker macro outlook and NAB's higher SME exposure would likely keep the market focused on credit quality in the near term.

Macquarie has a price target of $39 on NAB shares.

Westpac Banking Corp (ASX: WBC)

Macquarie has an underperform rating on Westpac shares and a price target of $30.

They said there was downside risk in FY27 and FY28, driven by weaker margins and higher expenses.

They said the bank looked overvalued at current levels, as it was trading on similar metrics to NAB while offering lower returns.

The post Macquarie's verdict on the ASX banks: buy, sell or hold? appeared first on The Motley Fool Australia.

The answer is that it depends on your circumstances.

But there are useful benchmarks to work from and retiring at 60 rather than 67 is a key priority for many Australians.

What the superannuation benchmarks say

The Association of Superannuation Funds of Australia publishes a quarterly Retirement Standard.

For the March quarter of 2026, the Retirement Standard estimates a comfortable lifestyle needs a lump sum of $630,000 for a single person and $730,000 for a couple.

A comfortable standard covers private health insurance, a reasonable car, household goods and holidays.

Those figures assume you own your home outright and retire at 67, living to roughly 85.

ASFA also assumes a part Age Pension does some of the heavy lifting once assets fall below the relevant thresholds, which means the published figures already build in government support that an early retiree will not receive for years.

Why retiring at 60 changes the superannuation maths

Preservation age is now 60 for everyone born on or after 1 July 1964.

As a result, 60 is the earliest most people can access their superannuation, and only once they have actually retired.

The Age Pension, by contrast, does not begin until 67.

That leaves a seven-year window funded entirely from your own savings.

You also give up seven years of contributions and compounding.

A rough illustration helps here: seven extra years of drawing roughly $56,000 annually adds close to $400,000 in nominal terms.

Investment returns over that period reduce the shortfall, though not to zero.

On that basis, a single person retiring at 60 might reasonably target somewhere between $900,000 and $1 million.

A couple would be looking at meaningfully more again.

These are illustrations rather than forecasts, and individual circumstances vary enormously depending on home ownership, health costs, investment returns and whether any income continues in early retirement.

Where that money might be invested

A 60-year-old still has a long investment horizon.

The money may need to last 25 years or more.

That argues against shifting everything into cash on day one, though holding the first year or two of spending in something stable protects you from being forced to sell shares into a falling market.

To provide a few examples of return-generating long-term investments, the iShares S&P 500 ETF (ASX: IVV) provides exposure to large American companies.

Likewise, the Vanguard Diversified High Growth Index ETF (ASX: VDHG) bundles Australian and global shares into a single holding.

For investors looking for domestic income and returns, Commonwealth Bank of Australia (ASX: CBA) should remain a core position in many portfolios thanks to its fully franked dividends.

Franking credits are particularly valuable inside superannuation, where the tax rate is low in accumulation and nil in pension phase, meaning excess credits can be refunded rather than offsetting tax owed.

Foolish takeaway

The gap between the Retirement Standard benchmark and reality is wide for most Australians.

Median balances for those aged 60 to 64 sit well below these targets, and averages flatter the picture because a handful of very large accounts drag the mean upwards.

However, that does not make retiring at 60 impossible.

It usually means the plan needs savings outside superannuation as well, to bridge the years before the Age Pension arrives.

The post How much superannuation do I need to retire comfortably at 60? appeared first on The Motley Fool Australia.

The bank has a leading customer franchise, a strong digital offering, and a long record of rewarding shareholders.

But how can investors tell whether they are getting value for money at the current share price?

I would look at several simple valuation measures rather than relying on only one.

Start with the price-to-earnings ratio

CBA shares are trading around $176.07.

According to CommSec consensus estimates, the bank is forecast to generate earnings per share of $6.54 in FY26 and $6.72 in FY27.

That puts the shares on forward price-to-earnings ratios of approximately 26.9 times and 26.2 times, respectively.

CommSec data show CBA traded at an average annual price-to-earnings ratio of around 17.3 times across the 10 financial years to FY25. Its highest annual average during that period was 24.7 times in FY25.

A forward ratio cannot be compared perfectly with an annual historical average, but the figures still make one point clear. CBA is trading well above the valuation investors have generally paid over the past decade.

Consider the earnings yield

The earnings yield is simply the inverse of the price-to-earnings ratio.

Based on the consensus forecasts, CBA has an earnings yield of approximately 3.7% in FY26 and 3.8% in FY27.

This means each $100 invested at the current price is supported by less than $4 of forecast annual earnings.

That may be acceptable for a high-quality company capable of dependable growth, but it leaves less room for disappointment than a higher earnings yield would.

Check the dividend yield

CommSec forecasts dividends per share of $5.10 in FY26 and $5.15 in FY27.

At $176.07, those estimates produce forward dividend yields of approximately 2.9% in both years, before any value from franking credits.

CBA's average annual dividend yield over the decade to FY25 was around 4.5%.

The lower current yield reflects how strongly the share price has risen. Income investors are now paying considerably more for each dollar of expected dividends than they have historically.

Look at the price-to-book ratio

Book value measures the accounting value of a company's net assets attributable to shareholders.

CBA currently has book value of approximately $47.12 per share. Dividing its share price by that figure produces a price-to-book ratio of around 3.7 times.

Investors are therefore paying roughly $3.70 for every $1 of book value, which is high by historic and industry standards.

Banks capable of earning high returns on shareholder equity can deserve substantial premiums to book value. CBA's deposit franchise, customer relationships, technology, and reputation help explain why the market values it more highly than many competitors.

Still, a price-to-book ratio approaching four times shows investors are already expecting the bank to maintain exceptional performance.

Foolish takeaway

I think it is fair to concede that none of these measures makes CBA shares look cheap.

The price-to-earnings ratio and price-to-book ratio are high by historical standards, while the earnings and dividend yields are relatively modest.

However, valuation should also reflect business quality. CBA has a leading banking franchise, millions of customer relationships, strong digital engagement, and a history of producing reliable profits and dividends.

I would still buy CBA shares at around $176.07, particularly with a long holding period. But I would limit the size of the position because the current price already assumes plenty of future success.

The post How should I value the CBA share price? appeared first on The Motley Fool Australia.

The bulk of the market opens its books over the next four weeks.

Amongst all of that, Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP) are the names investors will be watching most closely.

Between them they account for a substantial slice of the S&P/ASX 200 Index (ASX: XJO), which means their results tend to shape the index return regardless of what the rest of the market delivers.

The ASX shares that go first

CBA will release its full year results and final dividend on 12 August, whereas BHP is expected to follow with its FY26 numbers roughly a week later.

The final CBA dividend goes ex on 19 August, with payment due on or around 29 September.

Both companies are index heavyweights, so their results tend to move the broader market on the day.

That makes them a useful barometer for what the rest of reporting season might deliver.

CBA's most recent earnings result

CBA reported its half-year results for the six months to 31 December 2025 on 11 February.

In those results, cash net profit after tax came in at $5.45 billion, up 6% on the prior corresponding period. Meanwhile, the net interest margin held steady at 2.04% on an underlying basis and return on equity rose 10 basis points to 13.8%.

The Common Equity Tier 1 capital ratio finished the half at 12.3%, comfortably above APRA's minimum requirement. What I found really encouraging was that loan impairment expense fell to $319 million as home loan arrears declined.

The board declared a fully franked interim dividend of $2.35 per share, equal to roughly 72% of cash profit.

Chief executive Matt Comyn said the bank's balance sheet settings "remain resilient with strong levels of capital, deposit funding and provisioning".

BHP's most recent earnings result

BHP delivered its half-year result in February, with revenue up 11% to US$27.9 billion. Underlying EBITDA rose 25% to US$15.5 billion at a margin of 58%. Copper generated record EBITDA of US$8 billion, accounting for just over half of group earnings.

The interim dividend came in at 73 US cents per share, a 46% lift on the previous half.

Its recent operational review carried a warning, though: BHP guided FY27 copper production to between 1,650 and 1,800 kilotonnes, down from 1,953 kilotonnes in FY26.

That step down is driven largely by a forecast grade decline at Escondida, where concentrator feed grade has already slipped to 0.90% from 1.02% a year earlier.

Why these ASX shares could set the tone

Morgan Stanley has flagged estimate dispersion across the ASX 300 at 10.6, up from 9.7 in February and above the 20-year average of 10.

Close to 30% of companies carry analyst forecasts that are 80 days old or more, while 53% are working from estimates of at least 50 days.

Equity strategist Chris Nicol warned that "widening dispersion suggests consensus forecasts may be becoming increasingly stale", which lifts the scope for sharp share price reactions on results day.

For CBA, the questions are margin direction and the size of the final dividend.

For BHP, it is whether the market looks through a softer FY27 copper outlook to the growth pipeline beyond it.

Given both companies together represent more than 20% of the broader ASX 200, should both results outperform expectations, investors can reasonably expect the ASX 200 to outperform accordingly.

Foolish takeaway

These two ASX shares may not tell the whole story of August for the ASX.

But given that they represent more than 20% of the market, they will tell investors plenty about the health of the banks and the miners.

Those two sectors still drive the bulk of returns on the Australian market, and that makes the second and third weeks of August worth marking in the diary.

The post Reporting season starts next week. Here are the ASX shares to watch appeared first on The Motley Fool Australia.