The Commonwealth Bank of Australia (ASX: CBA) share price has been having a rather wild week this week. CBA shares are down 0.24% at the time of writing today to $87.57 a share after briefly spiking to $88 at open this morning. That's not too far away from the company's 52-week high of $89.20 that we saw back in February. It's also not too far away from the CBA share price's all-time high of ~$94 that we saw way back in 2015.
CommBank has been a pretty decent share to have owned over the past year or so. CBA is up roughly 4.5% so far in 2021, up 26.4% over the past 6 months, and up more than 41% over the past year.
But is the CBA share price a buy today at these levels? Let's take a look to see if there's anything to like with the ASX's biggest banking share right now.
What's been happening at Commonwealth Bank?
First of all, it's worthwhile noting that things seem to be going the right way for the CBA share price lately. An expanding economy and loser regulations from the Australian Prudential Regulatory Authority (APRA) is likely to result in favourable business conditions for Commonwealth Bank over the short-to-medium term. Today's employment numbers certainly add weight to that thesis. As we reported on recently, one commentator is expecting these factors to result in a 15% expansion in bank valuations.
If CBA does manage to boost its earnings over 2021 and beyond, it will also be able to keep increasing its dividends. Perhaps even to a level that we were seeing before the pandemic hit.
Let's recap CommBank's dividends for a moment, seeing as many (if not most of) CBA's retail investors hold Commonwealth Bank shares for this reason.
So CommBank paid out $4.31 in dividends per share in 2019 and $2.98 per share in 2020. Perhaps luckily for CBA, its first dividend of 2020 was paid out just before the pandemic hit.
Back in March, CBA paid out its first dividend for 2021, which came in at $1.50 per share. That's still a long way off of the $2 per share payment from last year. So on the current CBA share price, the bank currently has a trialling dividend yield of 2.83%. If we annualise its most recent dividend, we get a potential yield of 3.43%. That's still a long way from what Commonwealth Bank shareholders would be used to. Remember, the CBA share price is now back to roughly the level it was before the pandemic. Its dividend is not.
Is the CBA share price a buy today?
Prospective buyers might be disappointed with what broker Goldman Sachs thinks of CBA shares right now. According to CommSec, Goldman has a 'sell' rating on Commonwealth Bank, with a price target of $73.64. Goldman cites CBA's significant exposure to the retail mortgage market, as well as its significant pricing premium over the other ASX banks, for its rating.
At the current level, the CBA share price has a price-to-earnings (P/E) ratio of 19.48 and a market capitalisation of $155.4 billion.
