Can the bank continue to rank at the top end of global dividend-payers?
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Commonwealth Bank of Australia (ASX: CBA) shareholders have been well-rewarded through dividends over the past three decades. The bank can provide significant dividends thanks to its large profits and generous dividend payout ratio.
CBA shares don’t exactly offer the biggest dividend yield around. However, one financial institution reckons CBA’s total cash pile, which it distributes to shareholders each year, is one of the largest in the world.
The global scale
According to Janus Henderson, global dividends reached a record of $431.1 billion in the third quarter of 2024, up 3.1% year over year. Its dividend report showed that 88% of companies raised their payouts or held them steady. The typical (median) company raised its dividend by 6%.
Janus Henderson reported that banks and media companies (including internet media) contributed the largest share to dividend growth.
In terms of the global dividend outlook, Janus Henderson also expects companies to pay $1.73 trillion in dividends in 2024. This is up 4.2% from the previous year.
How does the bank’s payout compare?
For the third quarter of 2024, CBA’s dividend was the sixth-largest dividend payment in the world, according to Janus Henderson.
The bank’s dividend was higher than those of other huge global payers, such as Apple, Exxon Mobil, and JPMorgan Chase.
The five companies that eclipsed CBA’s dividend were China Construction Bank, China Mobile, PetroChina, Microsoft and Alibaba.
Incredibly, the world’s top 20 dividend payers were responsible for a total payout of $84.9 billion.
In this light, CBA shareholders may wonder if the ASX bank share will remain one of the world’s biggest dividend payers.
Projections for the CBA dividend
The 2024 calendar year has been great for shareholders, with the CBA share price up a surprising 40%. The chart below shows the incredible rise of Australia’s biggest company.
While profit growth may be challenging for the overall banking sector in the short term due to strong competition and rising arrears, CBA may still be able to deliver decent growth.
According to the independent forecast on Commsec, the bank is projected to make earnings per share (EPS) of $6.31 in the 2025 financial year and grow its annual dividend per share by 6.4% to $4.95 per share, which would be a fully franked dividend yield of 3.1%.
In the 2026 financial year, the ASX bank share could see EPS rise again to $6.90. This could fund a 9% increase in the payout to $5.40 per share. That would mean the FY26 annual payment could represent a fully franked dividend per share of 3.3%.
It appears the growing CBA dividend could keep it among the world’s biggest dividend payers, assuming other companies don’t implement huge dividend hikes.
JPMorgan Chase is an advertising partner of Motley Fool Money. Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, JPMorgan Chase, and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Alibaba Group and has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Apple and Microsoft. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
