In afternoon trade, the National Australia Bank Ltd (ASX: NAB) share price is on course to end the year in a positive fashion.
At the time of writing, the banking giant's shares are up 0.5% to $30.09.
As you can see below, if it ends this way, it will mean that the NAB share price has risen 2.5% in 2022.
While on paper this doesn't look amazing, it's actually a lot better than it seems. Firstly, this return doesn't include the 5% dividend yield that shareholders have received this year.
Secondly, over the same period, the S&P/ASX 200 Index (ASX: XJO) has lost approximately 5% of its value.
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Broker tips NAB share price to outperform in 2023
The good news is that Goldman Sachs believes the NAB share price can be a market-beater again in 2023.
According to a recent note, its analysts have a buy rating and $35.41 price target on the bank's shares. This implies potential upside of almost 18% for investors in 2023.
In addition, the broker expects NAB to increase its fully franked dividend to $1.77 per share next year. Based on the current NAB share price, this will mean an attractive yield of 5.7%, bringing the total return to almost 24%.
Why NAB?
Goldman explained that it likes NAB in the current environment due to its exposure to commercial lending and productivity benefits. It explained:
Our Buy rating on NAB is predicated on: i) NAB providing the best leverage to the thematic that domestic volume momentum will favour commercial over housing volumes over both the short- and medium-term, ii) our expectation that commercial lending will be better insulated from competitive pressures particularly prevalent in mortgage lending, iii) NAB's cost management initiatives, which seem further progressed vs. peers, has allowed it to deliver the highest levels of productivity over the last three years, and we think this leaves it well positioned for an environment of elevated inflationary pressure.
