How does the CBA dividend compare with other ASX 200 banks right now?

Find out whether CBA holds the mantle as the top yielding dividend pick among ASX 200 bank shares.

| More on:
Hand of a woman carrying a bag of money, representing the concept of saving money or earning dividends.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

For many years, the Commonwealth Bank of Australia (ASX: CBA) dividend has boosted the wealth of millions of Aussies as one of the most popular shares held among individuals and super funds. But does it still make sense for those on the hunt for the best income?

At the final bell on Wednesday, shares in Australia's largest retail bank finished 0.4% lower at $101.70. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) fell a deeper 0.74% during a rough day for materials.

Based on the closing price, CBA shares now trade on a trailing dividend yield of 4.3%. For context, the dividend yield of the ASX 200 benchmark is calculated to be 4.1%. So, already, shareholders know the CBA dividend is generating a higher return than the broader index.

However, is it competitive against other ASX 200 bank shares?

Which ASX 200 bank pays the most?

I've compiled a list of all the ASX-listed banks that are included in the ASX 200 index. It turns out there are only ten bank shares among the top 200 listed companies. It is a small collection considering the sector's enormous composition in the benchmark based on market capitalisation.

A quick inspection of the table below shows CBA does not currently offer the highest dividend yield. As a matter of fact, we must work our way down to the eighth spot on the list to find the gold-emblazoned bank.

ASX-listed bankShare priceDividend yieldPayout ratio
Bank of Queensland Ltd (ASX: BOQ)$5.777.6%132%
Bendigo and Adelaide Bank Ltd (ASX: BEN)$9.106.6%69%
Virgin Money UK (ASX: VUK)$3.136.2%36%
Westpac Banking Corp (ASX: WBC)$21.526.2%73%
ANZ Group Holdings Ltd (ASX: ANZ)$25.386.1%63%
National Australia Bank Ltd (ASX: NAB)$28.985.5%68%
Suncorp Group Ltd (ASX: SUN)$13.764.4%66%
Commonwealth Bank of Australia (ASX: CBA)$101.624.3%75%
Macquarie Group Ltd (ASX: MQG)$171.934.2%55%
AMP Ltd (ASX: AMP)$1.283.9%-333%
Data as of 3pm AEST 13 September 2023

The top spot, instead, goes to the Bank of Queensland — touting a gargantuan dividend yield of 7.6%.

However, with a payout ratio of 132%, it appears the Brisbane headquartered bank paid out more than it earned in the last year. This means future payments of a similar size may be in jeopardy in the future unless the bank can increase its earnings.

Interestingly, all of the other Big Four peers outcompeted CBA on dividend yield. The highest being Westpac, with a yield of 6.2%. Moreover, they are all carrying lower payout ratios than big yellow.

Is the CBA dividend yielding more than it did in the past?

For the diehard CBA shareholders, comparing the banking giant to itself might be more helpful.

At its current 4.3%, the Commonwealth Bank is offering its poorest yield in more than 18 years (excluding COVID). The last time the CBA dividend was even close to this low yield was in 2007, when the world was in the grips of the global financial crisis.

Yet, the bank is paying the most in annual dividends per share in its history.

How does that stack up?

Essentially, the CBA share price has outrun its dividend growth, compressing its yield.

Created with Highcharts 11.4.3Commonwealth Bank Of Australia PriceZoom1M3M6MYTD1Y5Y10YALL12 Sep 201813 Sep 2023Zoom ▾Jan '19Jul '19Jan '20Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '232019201920202020202120212022202220232023www.fool.com.au

As of right now, CBA shares trade on a price-to-earnings (P/E) ratio that has only been witnessed briefly in 2021, 2019, 2010, and 2007.

Motley Fool contributor Mitchell Lawler has positions in Commonwealth Bank Of Australia and Macquarie Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Bendigo And Adelaide Bank and Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Bank Shares

Hand holding Australian dollar (AUD) bills, symbolising ex dividend day. Passive income.
Bank Shares

This is the ASX bank stock with the largest dividend yield right now

Looking to ASX bank stocks for dividend income right now?

Read more »

A man sits in deep thought with a pen held to his lips as he ponders his computer screen with a laptop open next to him on his desk in a home office environment.
Bank Shares

ASX banking sector: Is it time to consider a regional bank?

The big 4 banks are widely considered to be overvalued.

Read more »

A person leans over to whisper a secret to a colleague during a meeting.
Bank Shares

Here are the latest growth forecasts for the CBA share price

Can the bank continue rising? Here are some expert views.

Read more »

A businessman presents a company annual report in front of a group seated at a table
Bank Shares

Earnings season predictions: Macquarie weighs in on the big 4 banks

What are the broker's predictions?

Read more »

Contented looking man leans back in his chair at his desk and smiles.
Bank Shares

Major CBA investor reveals why he's all in

This investor described one major reason driving his investment in CBA shares.

Read more »

Young investor sits at desk looking happy after discovering Westpac's dividend reinvestment plan
Bank Shares

Invested $10,000 in Westpac shares 2 years ago? Guess how much you've already banked!

Atop their regular dividend payments, Westpac shares have enjoyed a strong two-year run.

Read more »

Woman calculating dividends on calculator and working on a laptop.
Bank Shares

Buying CBA stock today? Here's the dividend yield you'll get

CBA's yield right now might surprise you.

Read more »

A financial expert or broker looks worried as he checks out a graph showing market volatility.
Bank Shares

How much would the ASX 200 fall if CBA shares returned to 'fair value'?

CBA shares account for 12% of the ASX 200.

Read more »