As usual, Commonwealth Bank of Australia (ASX: CBA) was one of the first S&P/ASX 200 Index (ASX: XJO) shares, and the first ASX bank share, to kick off the latest earnings season that we have just entered. Yesterday morning, we heard from CBA, which you can read more about here.
Given that CommBank, much to the delight of investors, announced another dividend pay rise, I thought it would be a good opportunity to check out which bank stock is currently offering investors the highest dividend yield right now.
To kick things off, it is definitely not CBA. Sure, the ASX's largest bank did reveal an impressive final dividend of $2.70 per share (fully franked, of course), a 4% increase over last year's final dividend. Even so, this bank is currently trading at a very unbank-like yield of just 2.95%. Even if we factor in the new payout, CBA's forward yield rises to 3.01%.
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Big yields from the big four?
CBA's big four peer, National Australia Bank Ltd (ASX: NAB), currently sports a more traditional yield for a bank stock, though. Over the past 12 months, NAB has doled out $1.70 per share in fully-franked dividends. Last month's interim dividend of 85 cents per share was the most recent payout from NAB.
At the current NAB share price, that gives this bank a trailing dividend yield of 4.12%.
Westpac Banking Corp (ASX: WBC) ups the ante yet again. This bank's most recent dividend came on 26 June. It was worth 77 cents per share, with full franking credits attached (as is Westpac's habit). Combined with the 77 cents per share final dividend from December last year, we have an annual total of $1.54 per share in fully-franked dividends from Westpac. That works out to be worth a yield of 4.33% at present pricing.
Let's get to our final big four bank now. ANZ Group Holdings Ltd (ASX: ANZ) is an interesting case. On paper, it tops the big four with a current yield of 4.41%. That hails from the July interim dividend of 83 cents per share, as well as the equally valued final dividend from December.
However, ANZ is the only big four bank that no longer attaches full franking credits to its payouts. The July dividend came partially franked at 75%, with the December payment franked to 70%. That muddies the waters a little.
What about the other ASX bank shares?
Whilst the big four banks are certainly the most popular of their kind on the ASX, they are not without rivals, in both life and in dividend prowess.
There are two other ASX bank shares that both outstrip all four of the majors when it comes to dividend yields.
The first is Bendigo and Adelaide Bank Ltd (ASX: BEN). Bendigo Bank stock is currently trading on a trailing dividend yield of 5.67% – almost double that of CBA. The last two dividends that this bank funded, worth 30 and 33 cents per share respectively, came fully franked to boot.
The second is Bank of Queensland Ltd (ASX: BOQ). Bank of Queensland happens to be the highest-yielding bank stock on the market right now, sporting a trailing yield worth a whopping 6.26% at present. This monstrous figure stems from Bank of Queensland's last two dividends, worth 20 cents apiece. They also came fully franked.
However, before anyone rushes out to buy these last two banks for their income potential, it's worth pointing out a caveat. Both Bank of Queensland and Bendigo Bank are smaller banks in terms of size and scale compared to the majors. Their business models tend to be a little more fragile as a result, which bleeds into their dividend track records. Both have far more inconsistent payout histories than the big four, with their most recent dividends substantially below what investors have received in the past. Something to keep in mind when selecting your next ASX bank share for dividend income.
