Here's how much NAB (ASX:NAB)'s new dividend is worth

National Australia Bank Ltd (ASX: NAB) shares have been in the spotlight this week, as they have been all year after the coronavirus pandemic hit ASX banking shares hard. As an example, the current NAB share price is sitting at $19.43 at the time of writing. Now, that looks halfway decent if you consider that it's up more than 16% since 23 September. However, it's a different picture when you see that NAB shares are still down more than 20% year to date, and down more than 50% since November 2007.

As one of the big four ASX banks, many investors buy NAB for the strong dividend income the shares are known for (or at least, they used to be).

However, NAB (like all ASX banks) was forced to slash its dividends in 2020. This was done partly out of necessity and partly because of directions from the government regulator APRA (the Australian Prudential Regulatory Authority).

So far in 2020, NAB has paid one dividend: an interim payment of 30 cents per share (fully franked) doled out in July. That was better than Australia and New Zealand Banking Group (ASX: ANZ), which deferred its interim dividend, and Westpac Banking Corp (ASX: WBC) which didn't pay an interim dividend at all (and still hasn't).

It's worth noting that NAB's earlier dividend was also accompanied by a large capital raising program.

Post-COVID dividends for NAB shares?

This week, NAB released its full-year results for FY2020. It wasn't too upbeat, with the bank reporting a 36.6% decline in cash earnings and a 10.7% rise in expenses.

However, the bank also announced its final dividend for 2020. That will come in (again) at 30 cents per share (fully franked), and will be paid on 10 December.

It is worth noting that this dividend isn't exactly what NAB shareholders were used to. In 2019, NAB paid out 2 dividends of 83 cents a share each. In 2018, it paid out 2 dividends of 99 cents each.

So on the current share price, a 60 cents per share annual dividend gives NAB shares a trailing yield of 3.09%. If we include franking, this yield grosses-up to 4.41%.

Remember, this yield is trailing. That means that new investors after 12 November (when the final payout goes ex-dividend) will not necessarily get a 3.09% yield in 2021. We'll have to wait for whatever dividends NAB announces next year to be sure of what to expect. But this year's dividends give us some idea.