National Australia Bank Ltd (ASX: NAB) shares have been a great place to put your money over the past 12 months.
During this time, the banking giant's shares have outperformed the market by some distance.
This is great news for many Australians. That's because not only does NAB have 500,000+ shareholders, but its shares are also held by many leading superannuation funds.
So, even if you don't own them directly, you're still likely to be benefiting from their rise.
But what if you had invested $10,000 in NAB shares 12 months ago? Let's see what would have happened to your investment.
$10,000 invested in NAB shares
One year ago, you could have snapped up the big four bank's shares for $28.98 each. This means that a $10,000 investment would have allowed you to buy 345 units.
On Friday, the NAB share price ended the session at $38.28. This values your shares at $13,206.60, which equates to a very handsome return on investment of approximately $3,200 or 32%.
As a comparison, the S&P/ASX 200 Index (ASX: XJO) has risen 13.2% over the same timeframe.
Don't forget the dividends
But the returns don't stop there. Like the rest of the big four banks, NAB shares a good portion of its profits with its shareholders each year in the form of dividends.
Over the period, NAB has paid a fully franked final dividend for FY 2023 and a fully franked interim dividend for FY 2024. Both dividends were 84 cents per share, meaning a total of $1.68 per share was paid out to shareholders.
Those 345 units would have made you $579.60 in dividend income. This brings the total return to $3,786.20 or approximately 38%.
Is it too late to invest?
Unfortunately, the general consensus is that NAB shares are now overvalued following their impressive run.
For example, Morgan Stanley is one of the most positive brokers but only has an equal-weight rating and $34.20 price target on its shares. This implies potential downside of almost 11% for investors from current levels.
It's a similar story over at Goldman Sachs. Its analysts have a neutral rating and $34.24 price target on its shares. They commented last month:
We are Neutral-rated on NAB given i) while we are attracted to NAB's SME exposures (which is driven more by service proposition as opposed pricing which allows for better NIM management than housing lending), the stock's valuation is difficult to justify.
