CBA companies: Bankwest, Colonial First State, CommSec, ASB Group
About the Commonwealth Bank of Australia
The Commonwealth Bank, also known as CBA or CommBank, was established in 1911 and is the largest bank in Australia. Its services include retail banking, business banking, wealth management and home loans. It also owns Bankwest and ASB Bank in New Zealand. CBA's main rivals are Westpac, ANZ and NAB.
As a blue-chip dividend stock, CBA is a popular choice among Australian investors. Its dividend payment per share has remained fairly consistent compared to the other major banks, even during the 2018-2019 financial services royal commission.
Blue-chip. As one of Australia's biggest companies and the largest bank in Australia, CBA is considered a comparatively safe blue-chip stock choice among investors.
Dividend. One of the biggest pros for investors is CBA's consistently high dividend payout, even during times of volatility.
Consistent growth. Since it was listed in 1991, CBA's share price has grown steadily by more than 170% and many analysts expect that growth to continue.
No high returns. While safe, blue-chip financial stocks aren't likely to deliver the high returns that other more volatile stocks can offer.
Changing landscape. With new fintechs entering the arena, bigger companies such as CBA might be slower to adapt to the fast-changing landscape.
Scandals. CBA is still recovering from the fall-out of the 2019 royal commission that uncovered numerous occasions of misconduct and forced the bank to overhaul its advisory arms.
CBA major shareholders
Number of shares
Percent of capital
HSBC Custody Nominees
J P Morgan Nominees Australia
Citicorp Nominees Pty Limited
National Nominees Limited
BNP Paribas Noms Pty Ltd
Bond Street Custodians Limited
Australian Foundation Investment
Milton Corporation Limited
Argo Investments Limited
Nulis Nominees (Australia)
Mr Barry Martin Lambert
McCusker Holdings Pty Ltd
Invia Custodian Pty Limited
Australian Executor Trustees Limited
Australian Executor Trustees
BNP Paribas Noms (NZ) Ltd
RBC Dexia Investor Services Australia Nominees Pty Limited
Joy Wilma Lambert
Source: CBA, as at 15 July 2019
Should I buy CBA stock?
Technical analysis is used in finance to forecast the direction of prices by studying the past movements of markets. This is not a recommendation, it represents an analysis based on the most popular technical indicators: Moving Averages, Oscillators and Pivots. Finder might not concur and takes no responsibility.
Here are a few points to consider before deciding whether to buy Commonwealth Bank shares:
The share price. Read news articles, CBA company announcements and recommendations by major brokers on the share price. Also look at the share price chart to see if the price has dipped lower recently.
The dividend. As you can see from the table below, the annual CBA dividend has remained steady around the $4.30 mark for the past four years. However, this doesn’t mean it will continue to do so. The latest annual report will include details on the dividend payment for future years.
Financial performance. It’s a good sign if the company is increasing its profits each year, while also reducing its debt.
The other Big Four banks. Commonwealth Bank is in constant competition with Westpac, NAB and ANZ to gain more customers. How do CBA’s products and services compare to its rivals?
Future market conditions. Are there any upcoming changes to banking regulations that may affect CBA’s profits? Also consider what is happening in the financial services sector that might impact negatively on the bank, such as the Royal Commission into the banking sector that is being held throughout 2018.
Commonwealth Bank dividend history
The table below details the Commonwealth Bank dividend payments between 2017 and 2020. As you can see, while the dividend has changed slightly each six-month period, it has remained fairly steady around the $4.30 mark per year for the past four years.
It’s also fully franked, meaning Commonwealth Bank has already paid the tax on the dividend so the shareholder doesn’t need to pay tax on these dividends again.
What if you'd decided to buy $5,000 worth of stocks in CBA around 20 years ago? Today your stocks would have grown by more than 95% and you'd also have received dividends of more than $10,000.
The below chart compares your return on investment if you'd bought $5,000 in each of the four biggest companies on the Australian Securities Exchange (ASX) two decades ago. The franking credits are either used to offset the tax bill or paid as a cash refund if your tax bill is zero.
Share price 4 Nov 1999
Share price 4 Nov 2019
BHP Group Ltd
National Australia Bank
Profits (not including tax): $317,305.12
The data used in the chart is for the sake of the example only and should not be relied upon as factual advice or construed as providing recommendations of any kind.
How to buy Commonwealth Bank shares
Choose a share trading platform. If you’re a beginner, our table below can help you choose which broker to use.
Open your account. You’ll need your ID, bank details and tax file number.
Confirm your payment details. You’ll need to fund your account with a bank transfer, debit card or credit card.
Find the shares you want to buy. Search the platform for CBA shares and place a buy order. It's that simple.
When you successfully purchase shares, you’ll receive a confirmation note from the broker, and the money will be taken out of your cash account. For more info about buy stocks, you can read our guide on how to buy shares.
Compare share trading accounts to buy Commonwealth Bank shares
Kylie Purcell is the investments editor at Finder. She has a background in business and finance news with previous roles at SBS, Your Money, TVNZ, Switzer Group and The Adviser magazine. Kylie has a Master in International Journalism and a Graduate Diploma in Economics. When she's not writing about the markets you can find her bingeing on coffee.
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