CBA vs NAB vs WBC vs ANZ: Which Big 4 Bank Stock Scores Highest?

Australia's Big 4 banks — CBA, NAB, WBC, and ANZ — are the backbone of most dividend portfolios. They pay fully franked dividends, operate in a heavily regulated industry, and provide essential services that people need regardless of economic conditions.

But not all banks are created equal. Using Buffett's quality criteria and Barsi's dividend methodology, we've scored each bank to help you understand their relative strengths and weaknesses.

Important: This is analysis, not financial advice. Scores reflect historical data and methodology-based assessment. Past performance does not guarantee future results. Always conduct your own research. See our full disclaimer.

Why Banks Score Differently

Before comparing scores, it's important to understand that banks use different thresholds in our scoring system. Standard companies are measured against Buffett's 20% ROE threshold, but banks operate with fundamentally different capital structures:

This means bank scores focus on: ROE consistency, free cash flow, earnings predictability, dividend yield, dividend history, sector classification, and valuation metrics.

The Comparison

Commonwealth Bank (CBA)

Market Position: Australia's largest bank by market capitalisation. Dominant in retail banking, home loans, and digital banking.

Buffett Quality Assessment:

• ROE: Consistently the highest among the Big 4, typically 13-15%. Meets the bank-adjusted 12% threshold with room to spare
• Earnings Predictability: Strong — CBA has maintained positive earnings through the GFC and pandemic
• Free Cash Flow: Positive, supported by Australia's largest deposit base

Barsi Dividend Assessment:

• Dividend History: Decades of consistent payments, 100% franked. Pandemic cut in 2020 under APRA guidance, but recovered quickly
• Yield: Typically yields less than peers due to its premium share price. The higher price reflects market confidence — but it means lower income per dollar invested
• BESST Sector: Banking ✅

Key Trade-off: CBA is the highest-quality Australian bank, but its premium valuation often means a lower dividend yield. You're paying more for stability and market leadership. Whether the quality premium justifies the lower yield depends on whether you prioritise income (favour higher-yielding peers) or capital preservation (favour CBA's consistency).

Westpac (WBC)

Market Position: Australia's oldest bank (founded 1817). Strong in retail and business banking across Australia and New Zealand.

Buffett Quality Assessment:

• ROE: Historically lower than CBA, typically 10-13%. Has been improving as cost-reduction programs take effect
• Earnings Predictability: Good, though impacted by remediation costs from regulatory issues in 2019-2020
• Free Cash Flow: Positive, with improving trends as one-off costs normalise

Barsi Dividend Assessment:

• Dividend History: Long track record of consistent payments, 100% franked. Like all Big 4, cut during pandemic under APRA guidance
• Yield: Typically higher than CBA due to lower share price relative to dividends
• BESST Sector: Banking ✅

Key Trade-off: WBC offers higher yield than CBA but with slightly lower quality metrics. The bank has been on a multi-year improvement journey — if the turnaround succeeds, both ROE and dividends should benefit. If it stalls, the lower quality score becomes a concern.

National Australia Bank (NAB)

Market Position: Australia's leading business bank. Strongest franchise in SME and commercial lending.

Buffett Quality Assessment:

• ROE: Competitive with CBA in recent years, typically 12-14%. Business banking focus provides differentiated revenue
• Earnings Predictability: Good — business banking earnings can be slightly more cyclical than retail, but NAB's diversification helps
• Free Cash Flow: Strong, supported by business banking fee income and a growing deposit base

Barsi Dividend Assessment:

• Dividend History: Consistent payments, 100% franked. Pandemic recovery was solid
• Yield: Typically mid-range among the Big 4. Good balance of yield and quality
• BESST Sector: Banking ✅

Key Trade-off: NAB occupies the middle ground — not the cheapest (that's usually ANZ or WBC) and not the highest quality (that's CBA). Its business banking focus provides genuine differentiation and a growth engine that retail-heavy peers lack. If Australian small business thrives, NAB benefits disproportionately. If the economy contracts, business borrowers may be hit harder than homeowners.

ANZ Group Holdings (ANZ)

Market Position: Strongest institutional banking franchise among the Big 4. Growing retail presence through acquisitions. Significant New Zealand operations.

Buffett Quality Assessment:

• ROE: Typically 10-13%, at the lower end of the Big 4. Institutional banking has different return dynamics
• Earnings Predictability: More variable than peers due to institutional banking exposure and international operations
• Free Cash Flow: Positive but more volatile due to institutional banking capital requirements

Barsi Dividend Assessment:

• Dividend History: Consistent payments, 100% franked. Has occasionally offered the highest yield among the Big 4
• Yield: Often the highest among the Big 4 due to its lower share price
• BESST Sector: Banking ✅

Key Trade-off: ANZ often offers the highest yield, which is attractive for income-focused investors. However, its institutional banking exposure creates more earnings variability. The recent Suncorp banking acquisition adds retail scale but also integration risk. Higher yield comes with slightly higher uncertainty.

Side-by-Side Summary

Typical ranges reflect recent 3-5 year performance as of February 2026. Check individual stock pages for current figures.

What This Means for Dividend Investors

If You Prioritise Income

Higher yield today → ANZ or WBC typically offer the best starting income per dollar invested. ANZ frequently trades at the lowest price-to-earnings ratio among the Big 4.

But remember: higher yield sometimes signals the market expects lower growth or sees higher risk. Always check why the yield is higher — is the price cheap because the bank is out of favour, or because there's a genuine problem?

If You Prioritise Quality

Highest quality metrics → CBA consistently scores the best on ROE, earnings stability, and market position. You pay a premium, but you get Australia's strongest banking franchise.

The trade-off is a lower starting yield. For investors reinvesting dividends (DRIP) over a long time horizon, CBA's quality often compounds to higher total returns despite the lower initial income.

If You Want Balance

Middle ground → NAB offers a reasonable combination of quality and yield, with the added benefit of business banking differentiation. It's neither the cheapest nor the most expensive, neither the highest quality nor the lowest.

If You Can Only Pick One

This is a false choice for most investors. The Big 4 banks have different risk profiles and different cycle sensitivities. Holding 2-3 of them provides diversification within the banking sector — retail banking risk (CBA, WBC) is different from business banking risk (NAB) and institutional banking risk (ANZ).

Many experienced dividend investors hold positions in multiple Big 4 banks, weighting toward whichever currently offers the best value. Our stock screener updates scores daily as prices and data change.

The Franking Credit Advantage

All Big 4 banks pay 100% franked dividends. For Australian taxpayers, this means:

• At the 32.5% tax bracket: effective tax on bank dividends is just 2.5%
• At the 19% bracket: you receive a franking credit refund
• In an SMSF pension phase: the full 43% franking credit is refunded as cash

This makes Big 4 bank dividends one of the most tax-efficient income sources in Australia. For a detailed explanation, see How Franking Credits Work.

For SMSF trustees, see our guide on SMSF Dividend Strategy for how to maximise franking credit refunds inside super.

Banks and Economic Cycles

All banks are sensitive to economic conditions, but in different ways:

Rising interest rates: Generally positive for bank margins (wider spread between deposit and lending rates). CBA and WBC benefit most through retail mortgage books.

Recession: Business lending (NAB) and institutional lending (ANZ) typically see higher defaults first. Retail mortgages (CBA, WBC) are more resilient due to mandatory repayment structures and home equity buffers.

Recovery: All banks benefit, but NAB and ANZ often recover faster as business confidence returns and institutional activity increases.

Understanding these dynamics helps you decide whether to weight toward retail-heavy banks (defensive) or business/institutional banks (more cyclical but potentially higher returns during growth periods).

Key Takeaways

1. CBA is the quality leader — highest ROE, most stable earnings, premium price
2. ANZ often offers the highest yield — attractive for income, but more variable earnings
3. NAB provides differentiation — business banking focus offers a distinct risk/return profile
4. WBC is the turnaround story — improving metrics, but execution risk remains
5. All pay 100% franked dividends — maximising tax efficiency for Australian investors
6. Diversification within banks is sensible — holding 2-3 reduces concentration risk
7. Scores change daily — check the live screener for current ratings

Frequently Asked Questions

Which Big 4 bank pays the highest dividend?

ANZ typically offers the highest dividend yield among the Big 4 due to its lower share price relative to dividends. However, yield fluctuates with share price movements. Check the live screener for current yields — the highest-yielding bank changes frequently.

Are Big 4 bank dividends safe?

The Big 4 banks have decades of dividend payment history and operate under strict APRA regulatory oversight. While all four reduced dividends during COVID-19 under regulatory guidance, they recovered quickly. The combination of essential service demand, regulatory protection, and strong capital positions makes Big 4 dividends among the most reliable on the ASX.

Should I own all four Big 4 bank stocks?

Many experienced dividend investors hold 2-3 Big 4 banks rather than all four. While they share some risks (housing market, interest rates, regulation), they have different business mixes: CBA and WBC are retail-heavy, NAB focuses on business banking, and ANZ has institutional banking exposure. Diversifying across 2-3 provides sector coverage without unnecessary overlap.

Why is CBA more expensive than the other banks?

CBA commands a premium valuation because it has the highest ROE, most stable earnings, and dominant market position in Australian retail banking. Investors pay more for this quality and stability, which results in a lower dividend yield compared to peers. Whether the premium is justified depends on whether you prioritise income (favour higher-yielding peers) or capital preservation (favour CBA's consistency).

Check Live Scores

Want to see how each bank scores right now? Our stock screener applies Buffett and Barsi criteria daily to all four banks — with industry-specific thresholds that reflect their unique capital structures. For the complete methodology, see how it works.

Use the income calculator to model how Big 4 bank dividends compound over 10-25 years, including franking credit refunds and DRIP reinvestment.

Related reading:

• What Is ROE and Why Buffett Wants 20%+ — Understand the key quality metric behind bank stock scoring
• Top 10 ASX Dividend Stocks for 2026 — See where the Big 4 banks rank among all ASX dividend payers
• ASX Dividend Investing: A Beginner's Guide — Foundational guide to building a dividend portfolio