When it comes to long-term investing in Australia, Commonwealth Bank of Australia (ASX: CBA) often finds itself at the top of most investors’ watchlists—and for good reason. As the country’s largest and most profitable bank, CBA brings together the rare combination of stability, income, and growth. Whether you’re a first-time investor or a retiree looking to protect your wealth, CBA is considered one of the most dependable blue-chip stocks on the ASX.

But is it still worth buying today? Let’s explore how CBA fits into a smart, long-term portfolio.

CBA: Australia’s Banking Backbone

Founded in 1911, CBA has grown into a banking behemoth. It operates across retail banking, business lending, institutional services, and wealth management. Its massive customer base and strong brand recognition make it the cornerstone of Australia’s financial sector.

In fact, CBA consistently ranks among the top 10 companies by market capitalisation on the ASX and plays a major role in the financial health of the economy. When people think of “safe” Australian investments, CBA is usually top of mind.

1. Blue-Chip Stability You Can Count On

CBA’s dominant position in the home loan and deposit markets creates steady, recurring income streams. It owns one of the largest retail banking networks in Australia, which helps it maintain pricing power, customer loyalty, and profitability—even during economic downturns.

For example, during the COVID-19 crisis and subsequent rate hikes, many banks globally struggled. But CBA weathered the storm with resilience. In fact:

In H1 FY25, CBA reported

Total revenue of $35.07 billion

Net income of $5.13 billion

Operating cash flow surged by 48.46%, highlighting strong earnings quality

These are not the figures of a fragile institution—they reflect a defensive, cash-rich business that’s built to last.

2. Steady and Reliable Dividend Income

One of CBA’s most appealing features is its long-standing dividend policy. The bank typically pays out fully franked dividends twice a year, which not only provides regular income but also offers tax advantages for Australian investors.

The most recent dividend: $2.25 per share
Trailing 12-month dividend yield: 2.59% (with franking credits, effective yield is higher)

Even during the 2020 global banking shake-up, CBA managed to maintain its dividend better than most global banks. That’s why it’s considered a favourite among:

1. Retirees seeking income
2. Self-managed super funds (SMSFs)
3. Investors using dividend reinvestment plans (DRPs)

3. Digital Banking Leadership

CBA isn’t just Australia’s largest bank—it’s arguably its most technologically advanced. The bank has invested billions in modernising its operations, especially in digital banking, app-based services, machine learning, and cybersecurity.

Its CommBank app leads the industry in user engagement and functionality, enabling deep integration of customer analytics and personal finance tools. This digital edge gives CBA the ability to:

1. Reduce operational costs
2. Improve customer retention
3. Offer innovative features faster than its peers

This blend of tech-savviness with traditional banking is why many view CBA as a “future-proofed” bank.

ETF Inflows and Passive Investing Boost

Another underrated factor that supports CBA’s long-term performance is its inclusion in nearly every major ASX-focused ETF and index fund. With the rise of passive investing, large-cap stocks like CBA enjoy consistent buying pressure regardless of market conditions.

Over the past year, CBA shares rallied over 40%, partly due to passive fund inflows—even though profit growth was relatively modest (~2%).

Should You Buy at Current Valuations?

As of now, CBA is trading at a P/E ratio of 31.61—which is well above the banking sector average. This reflects the market’s confidence in CBA’s earnings reliability and its digital strategy, but it also means the stock isn’t cheap.

So, what does this mean for long-term investors?

1. If you already own CBA, there’s every reason to hold. It continues to deliver dependable results and dividends.
2. If you’re looking to buy, it may be wise to accumulate gradually—perhaps during market pullbacks—to avoid paying a peak premium.

Conclusion

Commonwealth Bank (ASX: CBA) isn’t just a bank—it’s a financial foundation. Its track record, dividend consistency, and forward-thinking digital strategy make it a cornerstone stock for any long-term, Australia-focused portfolio.

Yes, it’s priced at a premium—but that premium comes with quality, trust, and predictability. In investing, those traits are worth paying for.

So whether you’re starting your investment journey or fine-tuning your super fund, CBA deserves serious consideration as a core holding that can quietly compound wealth for years to come.

Disclaimer:

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