One of the oldest ASX shares in my investment portfolio is National Australia Bank Ltd (ASX: NAB). As a big four ASX bank share, NAB is a business most of us would be familiar with. But what makes NAB stock worthy of a place in my own portfolio?
Let's discuss why I think this ASX 200 bank share is a no-brainer dividend stock.
Why I own this ASX 200 bank in my share portfolio
When I first bought NAB stocks, this bank was the smallest of the big four, with Westpac Banking Corp (ASX: WBC), ANZ Group Holdings Ltd (ASX: ANZ) and Commonwealth Bank of Australia (ASX: CBA) all boasting bigger market capitalisations than NAB.
Today, the situation has almost been reversed. CBA is still the king of the pack, with a market cap of almost $190 billion. But NAB is now the silver medallist, commanding a value of $95.9 billion. That handily beats both Westpac ($80.8 billion) and ANZ ($77.4 billion).
I think this change of fortune is a byproduct of NAB's sturdy management team. Ross McEwan has headed NAB since late 2019 after coming over from the Royal Bank of Scotland. His tenure has been marked by prudent decision-making and competent stewardship.
Since buying NAB shares, I have enjoyed some capital growth. But, as is typical with ASX banks, most of my returns have come from dividends. Today, NAB is giving me a fully-franked yield of over 6% on my cost base. At the current share price of $30.83 (at the time of writing), investors are being offered a trailing dividend yield of 5.42%.
I'm very happy with NAB stock as a small part of my overall share portfolio. ASX banks enjoy some unique benefits in Australia, such as government guarantees on their deposits. This gives me a lot of confidence in the inherent stability of a business like NAB.
Plus, NAB stock is a valuable source of dividend income and franking credits every year. Given its superior management (in my view) in the baking sector, as well as its compelling levels of dividend income, I view NAB as a no-brainer dividend share.
But don't just take my word for it.
ASX expert picks NAB stock
According to a recent report in The Australian, an ASX expert is also recommending NAB stock to ASX investors right now. The report covers the views of Morgan Stanley analyst Richard Wiles.
Wiles has just upgraded the NAB share price to 'equalweight' from 'underweight'. Wiles reckons NAB is the "best way" to benefit from an expected soft landing for the Australian economy over the next 18 months or so.
This is due to a perceived "lower execution risk [and] better small-medium business enterprise banking performance."
Wiles also argues that NAB stock is a better pick for its increased "scope for larger provision releases and [share] buybacks than Westpac". That's in comparison to CBA in particular, which Wiles argues is "already fully priced for a soft landing".
