National Australia Bank Ltd (ASX: NAB), Wesfarmers Ltd (ASX: WES) and Australia and New Zealand Banking Group (ASX: ANZ) are three great dividend stocks.
However, if you're thinking of adding them to your portfolio, you might want to be a little patient and hold off buying at today's prices.
Here's why…
NAB is currently divesting its businesses in the USA and UK. As a result of these divestments, the short-term profit outlook for NAB is yet again uncertain, and may bring heightened amounts of volatility. Overlay that with a possible slowdown in the local economy, and NAB shares are a hold – at best – in my book.
Wesfarmers is also facing some headwinds in the short term and like NAB trades at a premium to intrinsic value. Although the Officeworks, Kmart and Bunnings Warehouse businesses are powering ahead, profits from Coles supermarkets could be set for added pressure if the rollout of Costco and Aldi continues. At today's prices I think it's a hold, at best. However, if Wesfarmers shares do come under heavy selling pressure, it could be a sound long-term buying opportunity.
ANZ is Australia's premier regional bank, with exposure to a number of growing Asian markets. The bank has the goal of generating 25% to 30% of revenues from its Asia the Pacific, Europe and Americas markets by 2017. Despite this, the move isn't risk free and a local economic slowdown could hurt the bank's share valuation in coming years. I rate it as a hold.
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