The National Australia Bank Ltd (ASX: NAB) share price has held up remarkably well during the last few weeks of stock market volatility that the S&P/ASX 200 Index (ASX: XJO) has experienced.
Since the start of August, the ASX 200 has tanked by a notable 6.6%. But over the same period, NAB shares have held steady – actually inching higher by 0.11%.
NAB's performance compares well against other ASX 200 bank shares. Take the largest ASX bank, Commonwealth Bank of Australia (ASX: CBA). The CBA share price almost exactly followed the ASX 200 since the start of August, tanking by 6.56%.
Meanwhile, the ANZ Group Holdings Ltd (ASX: ANZ) shares are down 2.55% over the same period, while Westpac Banking Corp (ASX: WBC) has slipped by 6.1%.
Yet despite this marked outperformance over its peers, investors might be wondering if the NAB share price is still cheap compared to much of its banking brethren.
So today, let's see how this ASX bank stock's valuation stacks up against its rivals.
How does the NAB share price compare to its ASX 200 bank rivals?
Looking at NAB's current price-to-earnings (P/E) ratio, we can see that the bank today trades at an earnings multiple of 12.69.
That measures up well against CBA's current ratio of 16.95. However, it is still above that of Westpac right now at 12.12. And it exceeds ANZ's bottom-of-the-pile 11.1.
As such, we can conclude that NAB is cheaper than CBA right now, but more expensive than both Westpac and ANZ.
This present pricing hierarchy is also reflected if we take a look at the big four's current dividend offerings. As we would expect, CBA's more expensive share price makes it the lowest-yielding ASX bank share out of the big four as it stands today. Right now, the CBA share price offers a dividend yield of 4.56%.
In contrast, NAB shares are sitting on a yield of 5.65%, while Westpac and ANZ offer 6.39% and 6.17% respectively.
This might be why Jabin Hallihan, analyst at ASX broker Morgans, has just given the NAB share price a 'hold' rating. Speaking to The Bull, Hallihan noted the following on how he sees NAB shares right now:
NAB enjoys strong relationships with small and medium-sized businesses. Investors are attracted to its dividend yield. However, economic weakness could impact NAB's business customers, and the bank's costs are rising.
The shares are cheaper than Commonwealth Bank, but more expensive than ANZ and Westpac. We retain a hold recommendation at this point.
That's a view that all ASX bank investors might find useful today.
The NAB share has had a tough year in 2023 so far and remains down by 3.26% year to date.
