MENU

Can the National Australia Bank Ltd. share price go higher from here?

Credit: NAB

The National Australia Bank Ltd. (ASX: NAB) share price is down 8.11% in just one month.

Indeed, despite the company releasing no material news, the market appears unimpressed by the bank’s trailing dividend yield of 6.6% fully franked. Grossed-up for those tax-effective franking credits, that’s a whopping yield of 9.4%!

Can the NAB share price go higher from here?

NAB’s new CEO, Andrew Thorburn, has made sweeping changes to the bank’s non-core assets, including the partial divestment of its life insurance business, to Japan’s Nippon Life; and Great Western Bancorp, located in the USA. Earlier in 2015, he also announced the divestment of the bank’s troubled Clydesdale Bank in the UK.

However, while these strategic initiatives have, and will continue to, spur investor sentiment, NAB faces regulatory risk, increased competition and the prospect of rising bad debts over the medium term.

Buy, Hold or Sell?

NAB’s new management are taking strides to steer the bank in a positive direction. However, with a cut to Australia’s economic growth forecasts increasingly likely, and credit markets expected get more competitive, I’d steer clear of buying back stocks, at least for the foreseeable future.

Forget NAB - Get our #1 dividend stock idea

I'm not buying NAB shares today, but that's okay because Scott Phillips, lead advisor of Motley Fool Share Advisor, has just announced his #1 dividend stock of 2015-2016 - I think it is a GREAT BUY today! Best of all, for a limited time, Scott is giving away its name and stock code free in his brand-new investment report! Simply click here, enter your email address and we'll send you his report.

Motley Fool contributor Owen Raskiewicz has no position in any stocks mentioned.

Owen welcomes your feedback on Google plus (see below), LinkedIn or you can follow him on Twitter @ASXinvest.

Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.