The half-year reporting season moves into prime time this week, with the first of the heavyweight reports, in the form of Commonwealth Bank (half-year), CSL (half-year) and Telstra (half-year), as well as full-year (December 2019) results from Woodside Petroleum, QBE Insurance and the beleaguered AMP.
Commonwealth Bank’s interim result on Wednesday will draw a lot of attention. Investors are likely to see a cash profit of about $4.4 billion – down from $4.7 billion a year ago – and an outlook that remains subdued, as compliance and regulatory costs rise faster than the bank can grow its loan book. There is the possibility of some capital management initiatives, and investors will be closely watching the interim dividend ($2 a share last year) for an indication that the expected $4.31 full-year payout for FY20 is at least going to be matched.
CBA is still viewed as one of the market’s most reliable dividend milk-cows – on analysts’ consensus estimates, it trades at a prospective FY20 yield of 5.1% fully franked (grossed-up: 7.3%). But investors buying that yield at present are, on analysts’ expectations, taking price risk. CBA trades at $84.80, but the analysts’ consensus target prices are $74.00 (Stock Doctor/Thomson Reuters), $73.414 (FN Arena).