ASX:CBA

Stock Analysis Report

Commonwealth Bank of Australia

Executive Summary

Commonwealth Bank of Australia provides integrated financial services in Australia, New Zealand, and internationally.


Snowflake Analysis

Flawless balance sheet second-rate dividend payer.


Similar Companies

Share Price & News

How has Commonwealth Bank of Australia's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CBA has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.1%

CBA

1.2%

AU Banks

0.4%

AU Market


1 Year Return

17.1%

CBA

5.3%

AU Banks

19.5%

AU Market

Return vs Industry: CBA exceeded the Australian Banks industry which returned 3.3% over the past year.

Return vs Market: CBA underperformed the Australian Market which returned 19.4% over the past year.


Shareholder returns

CBAIndustryMarket
7 Day1.1%1.2%0.4%
30 Day5.2%4.6%4.4%
90 Day5.3%-5.5%5.0%
1 Year24.0%17.1%12.0%5.3%24.9%19.5%
3 Year20.9%2.4%6.3%-11.3%38.6%20.0%
5 Year25.5%-4.9%11.5%-19.1%60.1%24.0%

Price Volatility Vs. Market

How volatile is Commonwealth Bank of Australia's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Commonwealth Bank of Australia undervalued compared to its fair value and its price relative to the market?

17.93x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: CBA (A$83.66) is trading above our estimate of fair value (A$68.91)

Significantly Below Fair Value: CBA is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: CBA is poor value based on its PE Ratio (17.7x) compared to the Banks industry average (11.3x).

PE vs Market: CBA is good value based on its PE Ratio (17.7x) compared to the Australian market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: CBA is poor value based on its PEG Ratio (8.1x)


Price to Book Ratio

PB vs Industry: CBA is overvalued based on its PB Ratio (2.1x) compared to the AU Banks industry average (1.1x).


Next Steps

Future Growth

How is Commonwealth Bank of Australia forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

2.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CBA's forecast earnings growth (2.2% per year) is above the savings rate (1.1%).

Earnings vs Market: CBA's earnings (2.2% per year) are forecast to grow slower than the Australian market (9.6% per year).

High Growth Earnings: CBA's earnings are forecast to grow, but not significantly.

Revenue vs Market: CBA's revenue (3% per year) is forecast to grow slower than the Australian market (3.8% per year).

High Growth Revenue: CBA's revenue (3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CBA's Return on Equity is forecast to be low in 3 years time (12.8%).


Next Steps

Past Performance

How has Commonwealth Bank of Australia performed over the past 5 years?

0.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CBA has high quality earnings.

Growing Profit Margin: CBA's current net profit margins (36.6%) are lower than last year (38%).


Past Earnings Growth Analysis

Earnings Trend: CBA's earnings have grown by 0.4% per year over the past 5 years.

Accelerating Growth: CBA's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: CBA had negative earnings growth (-7.7%) over the past year, making it difficult to compare to the Banks industry average (-10.6%).


Return on Equity

High ROE: CBA's Return on Equity (12%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Commonwealth Bank of Australia's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: CBA has a low level of unsold assets or inventory.

Debt Coverage by Assets: CBA's debt is not covered by short term assets (assets are 0.5x debt).


Financial Institutions Analysis

Asset Level: CBA's level of assets compared to its equity is moderate.

Allowance for Bad Loans: CBA has a sufficient allowance for bad loans.

Low Risk Liabilities: CBA's liabilities are made up of primarily low risk sources of funding.

Loan Level: CBA has an acceptable proportion of non-loan assets held.

Low Risk Deposits: CBA's loans are broadly funded by customer deposits.

Level of Bad Loans: CBA has an appropriate level of bad loans (0.36%)


Next Steps

Dividend

What is Commonwealth Bank of Australia's current dividend yield, its reliability and sustainability?

5.07%

Current Dividend Yield


Dividend Yield vs Market

company5.1%marketbottom25%2.3%markettop25%5.5%industryaverage5.9%forecastin3Years5.0%

Current dividend yield vs market & industry

Notable Dividend: CBA's dividend (5.15%) is higher than the bottom 25% of dividend payers in the Australian market (2.34%).

High Dividend: CBA's dividend (5.15%) is low compared to the top 25% of dividend payers in the Australian market (5.47%).


Stability and Growth of Payments

Stable Dividend: CBA's dividend payments have been volatile in the past 10 years.

Growing Dividend: CBA's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (91%), CBA's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CBA's dividends in 3 years are forecast to be covered by earnings (80.8% payout ratio).


Next Steps

Management

What is the CEO of Commonwealth Bank of Australia's salary, the management and board of directors tenure and is there insider trading?

1.7yrs

Average management tenure


CEO

Matt Comyn (43yo)

1.8yrs

Tenure

AU$4,358,636

Compensation

Mr. Matthew Comyn, also known as Matt, has been Managing Director, Chief Executive Officer and Executive Director at Commonwealth Bank of Australia since April 9, 2018 and served as its Managing Director a ...


CEO Compensation Analysis

Compensation vs Market: Matt's total compensation ($USD3.01M) is about average for companies of similar size in the Australian market ($USD3.87M).

Compensation vs Earnings: Matt's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

1.7yrs

Average Tenure

Experienced Management: CBA's management team is not considered experienced ( 1.7 years average tenure), which suggests a new team.


Board Age and Tenure

2.3yrs

Average Tenure

57.5yo

Average Age

Experienced Board: CBA's board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: CBA insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyAU$27,46902 Dec 19
Anne Templeman-Jones
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares342
Max PriceAU$80.43
BuyAU$7,76601 Dec 19
Genevieve Bell
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares97
Max PriceAU$80.06
BuyAU$8028 Nov 19
Mary Padbury
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares86
Max PriceAU$0.93
BuyAU$9,44626 Aug 19
Anne Templeman-Jones
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares126
Max PriceAU$74.97
BuyAU$9,59626 Aug 19
Genevieve Bell
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares128
Max PriceAU$74.97
BuyAU$8,39723 Aug 19
Mary Padbury
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares112
Max PriceAU$74.97
BuyAU$10,19623 Aug 19
Robert Whitfield
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares136
Max PriceAU$74.97
BuyAU$14,99330 May 19
Anne Templeman-Jones
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares192
Max PriceAU$78.09
BuyAU$10,31124 May 19
Genevieve Bell
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares141
Max PriceAU$73.13
BuyAU$8,99523 May 19
Robert Whitfield
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares123
Max PriceAU$73.13
BuyAU$8,04423 May 19
Anne Templeman-Jones
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares110
Max PriceAU$73.13
BuyAU$6,87423 May 19
Mary Padbury
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares94
Max PriceAU$73.13
BuyAU$73,19820 May 19
Catherine Livingstone
EntityIndividual
Role
Chairman of the Board
Independent Chairman of the Board
Shares1,000
Max PriceAU$73.20
BuyAU$35,35515 Feb 19
Paul O'Malley
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares500
Max PriceAU$70.71
BuyAU$70,63015 Feb 19
Catherine Livingstone
EntityIndividual
Role
Chairman of the Board
Independent Chairman of the Board
Shares1,000
Max PriceAU$70.63

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • David Keith Cohen

    Deputy CEO and Interim Group General Counsel

    • Tenure: 0.6yrs
    • Compensation: AU$2.93m
  • Matt Comyn (43yo)

    CEO, MD & Executive Director

    • Tenure: 1.8yrs
    • Compensation: AU$4.36m
  • Adam Bennett

    Group Executive of Business & Private Banking

    • Tenure: 8yrs
    • Compensation: AU$2.51m
  • Vittoria June Shortt

    Chief Executive & MD of ASB Bank Ltd.

    • Tenure: 1.9yrs
    • Compensation: AU$2.31m
  • Michael Venter

    Chief Operating Officer of Wealth Management

    • Tenure: 8.4yrs
    • Compensation: AU$924.04k
  • Alan Docherty

    Group Executive & CFO

    • Tenure: 1.7yrs
    • Compensation: AU$1.80m
  • Nigel Williams

    Group Chief Risk Officer

    • Tenure: 1.2yrs
    • Compensation: AU$3.68m
  • Sian Lewis

    Group Executive of Human Resources

    • Tenure: 1.4yrs
    • Compensation: AU$1.40m
  • Pascall Boillat

    Chief Information Officer & Group Executive of Enterprise Services

    • Tenure: 1.3yrs
    • Compensation: AU$4.73m
  • Angus Sullivan

    Group Executive of Retail Banking Services

    • Tenure: 1.8yrs
    • Compensation: AU$1.90m

Board Members

  • Catherine Livingstone (63yo)

    Independent Chairman of the Board

    • Tenure: 3yrs
    • Compensation: AU$884.54k
  • Shirish Apte (66yo)

    Independent Non-Executive Director

    • Tenure: 5.6yrs
    • Compensation: AU$369.54k
  • Paul O'Malley (55yo)

    Independent Non-Executive Director

    • Tenure: 1yrs
    • Compensation: AU$122.37k
  • Rob Whitfield (55yo)

    Independent Non-Executive Director

    • Tenure: 2.3yrs
    • Compensation: AU$285.32k
  • Anne Templeman-Jones (57yo)

    Independent Non-Executive Director

    • Tenure: 1.8yrs
    • Compensation: AU$322.24k
  • Matt Comyn (43yo)

    CEO, MD & Executive Director

    • Tenure: 1.8yrs
    • Compensation: AU$4.36m
  • Mary Padbury (60yo)

    Independent Non-Executive Director

    • Tenure: 3.6yrs
    • Compensation: AU$282.82k
  • Wendy Stops (58yo)

    Independent Non-Executive Director

    • Tenure: 4.8yrs
    • Compensation: AU$307.56k
  • Genevieve Bell

    Independent Non-Executive Director

    • Tenure: 1yrs
    • Compensation: AU$119.26k

Company Information

Commonwealth Bank of Australia's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Commonwealth Bank of Australia
  • Ticker: CBA
  • Exchange: ASX
  • Founded: 1911
  • Industry: Diversified Banks
  • Sector: Banks
  • Market Cap: AU$150.151b
  • Shares outstanding: 1.77b
  • Website: https://www.commbank.com.au

Number of Employees


Location

  • Commonwealth Bank of Australia
  • Tower 1
  • Ground Floor
  • Sydney
  • New South Wales
  • 2000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CBAU.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
CBAASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJan 1992
CWWDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
CBASWX (SIX Swiss Exchange)YesOrdinary SharesCHCHFJan 1992
CBACHIA (Chi-X Australia)YesOrdinary SharesAUAUDJan 1992
CMWA.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDJun 2008
CBAPDASX (Australian Securities Exchange)FRN SUB PERP AUD1000AUAUDOct 2014
CBAPEASX (Australian Securities Exchange)FRN SUB PERP AUD5000AUAUDMar 2016
CBAPHASX (Australian Securities Exchange)FRN PERP AUD5000AUAUDDec 2018
CBAPIASX (Australian Securities Exchange)FRN PERP AUD5000AUAUDNov 2019

Biography

Commonwealth Bank of Australia provides integrated financial services in Australia, New Zealand, and internationally. The company offers retail, premium, business, and institutional banking; and funds management, superannuation, insurance, investment, and share-broking products and services. It operates in six segments: Retail Banking Services, Business and Private Banking, Institutional Banking and Markets, Wealth Management, New Zealand, and International Financial Services and Corporate Centre segments. The company offers transaction and savings accounts, term deposits, personal and business loans, credit cards, insurance products, international payment, and private banking services, as well as home, car, and personal loans. It also provides financial planning and share trading services, managed funds, investment growth bonds, property investments, and self-managed super funds; allocated pensions and guaranteed annuities; and merchant, international and foreign exchange, insurance and risk management services. In addition, the company offers debt raising, financial and commodities price risk management, and transactional banking services; asset management, platform administration, and financial advice services. It operates 1,172 branches; and 3,963 ATMs in Australia. Commonwealth Bank of Australia was founded in 1911 and is headquartered in Sydney, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/01/25 10:33
End of Day Share Price2020/01/24 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.