National Australia Bank Ltd (ASX: NAB) is one of the largest dividend payers on the ASX.
It has a market capitalisation of around $105 billion, according to the ASX.
It is one of the big four ASX banks, alongside Commonwealth Bank of Australia (ASX: CBA), Australia and New Zealand Banking Group Ltd (ASX: ANZ), and Westpac Banking Corp (ASX: WBC).
So what can shareholders expect from the next NAB dividend? Let's take a look.
How big is the next NAB dividend going to be?
NAB's dividend has been recovering after the impacts of the COVID-19 pandemic.
In 2020, both of its dividends were $0.30 per share. The first half of FY21 saw an interim dividend of $0.60 per share. NAB increased the dividend again with the final dividend of $0.67. That brought the FY21 full-year dividend to $1.27 per share.
Many analysts believe the NAB dividend in FY22 will be increased again.
Commsec numbers, provided by third-party external data vendors, suggest the NAB dividend could increase by more than 13% to $1.44. That would represent a forward grossed-up dividend yield of 6.4% at NAB's Thursday closing share price of $32.47.
There are different brokers with varying estimates for the NAB dividend in FY22.
Macquarie currently rates NAB as a buy, with a price target of $32.50. However, its dividend expectations for the bank are lower than the estimate on Commsec for FY22. Macquarie's forecast for the FY22 grossed-up dividend yield is 6%. Macquarie suggests that bank margins could remain pressured by competition.
The broker Morgan Stanley thinks NAB will pay a grossed-up dividend yield of 6.2% in the current financial year.
Ord Minnett has one of the more optimistic views on the company's potential dividend. It thinks the NAB grossed-up dividend yield could be 6.44% in FY22.
UBS may have one of the biggest predictions for the NAB dividend out of all the brokers. The broker has pencilled in a dividend which translates into a potential grossed-up dividend yield of 6.6%.
What do we know about the upcoming NAB half-year result?
NAB's half-year result is due to be released on 5 May.
Two months ago, the bank announced its first-quarter update. NAB said it generated $1.8 billion of cash earnings. This represented cash earnings growth of 9.1% year on year. Cash earnings before tax and credit impairment charges were up 6%.
NAB said volumes were "strong" over the quarter, with lending and deposits each up $18 billion. In Australia, over the three months to December 2021, home lending grew 2.6%, and small and medium enterprise (SME) business lending increased by 3.4%. Its market share of core lending and deposit products increased. New Zealand loan growth was "strong" at 2.2%.
NAB said it was optimistic about the outlook for Australia and New Zealand. The CEO said the bank is well-positioned to continue to grow with a strong balance sheet and disciplined execution of a clear strategy.
It recently completed a $2.5 billion share buy-back and announced a further buy-back of another $2.5 billion.
