It's been a very interesting week indeed for the Commonwealth Bank of Australia (ASX: CBA) share price. CBA shares started the week at $178.01 each. But as it stands this Friday afternoon, the ASX's largest bank share is languishing at $166.89.
That's down a painful 6.3% over the past week, not to mention down about 1.3% today alone.
Of course, with the markets having a week to forget following last week's record highs, it's understandable that CBA would take a bit of a breather, all else being equal. However, not all else is equal.
This week, CBA happened to report its latest earnings, covering its 2026 financial year. As we covered at the time, there was much to like. CBA revealed a record statutory net profit after tax of $10.9 billion, up a healthy 8% over last year's profit.
That helped the bank to declare another record dividend, this time a final dividend of $2.70 per share, fully franked. That's a 3.85% rise over last year's final dividend of $2.60.
That took CBA's annual dividends to $5.05 per share, again a 4.12% rise over the 2025 total of $4.85 per share in dividends that shareholders received.
Even so, it seems investors expected more. CBA shares fell 0.7% on the day these results came out, and have just kept dropping since.
How far to a 4% yield for CBA shares?
However, despite the CBA share price coming off the boil this week, its dividend yield is still not even remotely close to what your average ASX investor might expect from a big four bank stock. Today, CBA's yield is sitting at 3.02%. That's more than 1% below the yield of its next-closest big four bank. That would be National Australia Bank Ltd (ASX: NAB), which currently sports a 4.11% yield.
So today, I thought it would be illuminating to theorise just how much further CBA shares would have to fall to come close to what the other major banks are offering. We'll be kind and use a flat 4% yield.
So, assuming that CBA, at a minimum, keeps its dividends at 2026 levels going forward, this ASX bank would have to fall to $126.25 a share for investors to enjoy a starting dividend yield of 4%.
That's the magic number at which an annual dividend of $5.05 per share would give an investor a 4% yield. Of course, that would necessitate that CBA falls by a painful 24.35% from where it is today. CBA is arguably one of the ASX's most resilient stocks, and to wait for it to lose almost a quarter of its value is a hard ask. Although stranger things have happened.
So, for at least the foreseeable future, it seems that ASX income investors just have to accept a very unbank-like yield from this bank share.
The post Here's how much CBA shares would have to fall for a 4% dividend yield appeared first on The Motley Fool Australia.
Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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