Can the Commonwealth Bank of Australia (ASX: CBA) share price crack $100 a share? That question has vexed ASX investors for years now. The first time CBA shares approached the $100 a share mark was in March 2015. Back then, CBA had just enjoyed 12 months of solid share price appreciation. The ASX bank put on around 30% from March 2014 to March 2015.
At the time, many commentators wondered which ASX blue chip would get to $100 first: CBA or CSL Limited (ASX: CSL). Well, CommBank got to a high of approximately $94 in March, and that was the highest it ever reached. Until this month at least. Meanwhile, CSL went on to comprehensively beat out Commonwealth Bank, rising past $100 to $200 and even $300 a share eventually. But that's a story for another day.
Last week, CBA finally beat its 2015 all-time high and rose to a new high watermark. Just today, CBA has built on these gains and reached a new high of $98.84 a share. So with the big 'triple-digits' now firmly in CBA's sights, can it finally break the $100 mark?
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Breaking $100 a share? CommBank, er, CAN?
An article in The Australian today reckons it's not a case of 'if', but a case of 'when' and 'by how much'. That's because, uniquely amongst the ASX banks, CommBank has a pantry full of capital that puts it at the front of the banking pack when it comes to returning cash to shareholders. The report asserts CBA has "a large and growing capital surplus and a healthy franking balance of $2.3 billion". This can be deployed in the near future to return around $22 billion to shareholders.
The report also reckons "the odds favour" CBA unveiling a $6 billion off-market share buyback when it delivers its annual results in August. All of these possibilities won't be lost on ASX bank investors, which probably explains why CBA is the only big four bank to be trading anywhere near its all-time high right now, not to mention making new ones.
The report predicts CBA will "sail through $100" in the next few weeks, barring unforeseen events of course. We'll have to wait and see if CommBank can finally break $100 a share. But the odds look in its favour, if this report is to be believed. At the current share price, Commonwealth Bank of Australia has a market capitalisation of $174.62 billion, a price-to-earnings (P/E) ratio of 21.9 and a trailing dividend yield of 1.52%.
