Following the release of its half-yearly results last week, National Australia Bank Ltd (ASX: NAB) remains in a trading halt as it undertakes the institutional component of its record-breaking $5.5 billion rights issue.
NAB, along with big bank rivals Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC), has seen its share price rally in recent times as investors' insatiable desire for dividend stocks went ahead when interest rates fell.
However in the past month alone, NAB shares have fallen 11%, whilst CBA is down 13%, Westpac has fallen 15.5% and Australia and New Zealand Banking Group (ASX: ANZ) is 13.2% lower.
Despite their alluring dividends, they've each been overpriced for some time so the share price falls should come as no surprise to prudent investors. But if more banks start issuing capital like NAB you can bet there'll be more falls in store for the big four banks.
That's why I'm not buying big bank shares and am currently looking elsewhere for reliable dividends and cheap share prices.
Here are two dividend stocks I'd buy before National Australia Bank today.
- Coca-Cola Amatil Ltd (ASX: CCL) is Australia's distributor of Coca-Cola and Beam-branded products. It also has the right to distribute Coca-Cola products to five neighbouring countries, including New Zealand and Indonesia. As Motley Fool contributor Sean O'Neill wrote earlier today risks certainly persist, however, with its turnaround strategy now implemented and a fresh cash injection from its parent the risk-reward trade-off for Coca-Cola Amatil shares appears worthwhile. It's offering a 4.3% partially franked dividend.
- Computershare Limited (ASX: CPU) is a leading share registry services business, connecting shareholders and their respective companies in over 20 countries. Whilst Computershare shares are forecast to pay a grossed-up dividend yield equivalent to 3.3% in the next year, it's a direct beneficiary of higher U.S. interest rates which are, in my opinion, likely to rise quicker than many people expect. This could provide the impetus for management to further increase its payout over time.
Should you buy Computershare today?
