NAB (ASX:NAB) share price is now trading on a forecast 4.4% fully franked dividend yield

NAB shareholders have enjoyed solid returns since this time last year.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The National Australia Bank Ltd (ASX: NAB) share price has been pushing higher over the last 12 months, up 60%. In comparison, the S&P/ASX 200 Index (ASX: XJO) has posted a 24% gain.

At Friday's market close, NAB shares added to the strong gains, finishing 1.03% higher to $27.35.

Australian dollar $100 notes fall out of the sky, indicaticating a windfall from ASX bank shares

Image source: Getty Images

What did NAB last report?

Investors have been bidding on the NAB share price in 2021 as the company continues to impress the market.

In early August, NAB updated the ASX with its third-quarter scorecard, highlighting an "encouraging" performance.

Cash earnings rose by 10.3% to $1.7 billion compared with Q3 last year, supported by significantly better credit impairment outcomes. Particularly, momentum picked up across its business portfolio.

In Australia, house lending rose 2% along with the small-to-medium business segment, growing 4.3%. The New Zealand segment saw lending increase by 2.7%.

Unaudited statutory net profit for the group came to $1.65 billion.

NAB noted that continued COVID-19 outbreaks and lockdowns are creating uncertainty and challenges for some customers. However, it remains optimistic on the long-term outlook for both Australia and New Zealand.

It appears that the bank is poised for a strong return when the economies re-open following the accelerated vaccination programs.

How much is NAB scheduled to pay in dividends?

The bank is scheduled to report its full-year results on 9 November. Investors may be wondering what kind of dividend payment to expect ahead of the release.

NAB paid a fully franked dividend of 60 cents per share in July for the first half of FY21. This was double of FY20's dividend (30 cents) and also double of the prior corresponding period (H1 FY20).

Goldman Sachs is forecasting NAB to reward shareholders with a total FY21 dividend payment of 125 cents. This implies a final dividend payment for FY21 of 65 cents per share.

When calculating against the current share price, NAB is trailing on a forecast fully-franked dividend yield of 4.4%. It is expected that the payout ratio will be somewhere between 68% to 70% of the bank's profits.

It's worth remembering that the company has been a relatively consistent dividend payer over the years. Before the onset of COVID-19, the bank had been paying shareholders fully franked dividends of 99 cents on a bi-annual basis.

About the NAB share price

In 2021, the NAB share price has continued to rise in value, gaining more than 20% for investors.

NAB commands a market capitalisation of approximately $89.76 billion, with about 3.2 billion shares on its books.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Dividend Investing

View of a business man's hand passing a $100 note to another with a bank in the background.
Bank Shares

New ANZ dividend: Here's everything you need to know

ANZ's new dividend has just been revealed.

Read more »

A man points at a paper as he holds an alarm clock, indicating the ex-dividend date is approaching.
Dividend Investing

16 ASX shares going ex-dividend in May

Newmont is among the ASX shares to go ex-dividend this month.

Read more »

Man holding fifty Australian Dollar banknotes in his hands, symbolising dividends.
Dividend Investing

3 star ASX dividend income stocks for the rest of 2026

I rate these businesses as strong income buys.

Read more »

Children skipping and jumping up a hill.
Dividend Investing

Want passive income? These ASX dividend shares offer 5%+ yields

These companies grow their payouts over time.

Read more »

A golden egg with dividend cash flying out of it
Dividend Investing

These ASX dividend shares keep giving investors a pay rise

I think these businesses are excellent options for regular payout growth.

Read more »

A graphic of a pink rocket taking off above an increasing chart.
Dividend Investing

$1,000 buys 23 shares in an incredibly reliable ASX 200 dividend stock

This business offers incredible reliability with dividends.

Read more »

A happy elderly man wearing a red cape smiles as he jumps up like a hero from a massage table.
Dividend Investing

3 ASX dividend stocks I'd buy if I were a retiree

Reliable dividends often come from predictable demand. These three stocks highlight where that stability can be found.

Read more »

Beautiful young couple enjoying in shopping, symbolising passive income.
Dividend Investing

3 ASX dividend shares to build a passive income

Looking for passive income? These shares have been named as buys by analysts.

Read more »