National Australia Bank Ltd (ASX: NAB) shares have been in the green since the bank released its 1H FY25 results on Wednesday.
In terms of dividends, NAB increased its interim dividend by 1 cent per share to 85 cents per share, with 100% franking.
If you're not already invested in NAB shares and you wouldn't mind partaking in the next round of dividend payments, time is running out.
NAB goes ex-dividend on Monday, so you only have until the market close today to snap up some stock with the dividend still attached.
NAB will pay the dividend on 2 July.
Existing NAB investors who would prefer to receive more stock instead of a cash payment also have to be quick.
You have until 5pm AEST next Wednesday to submit your dividend reinvestment plan (DRP) elections.
The DRP share price will be based on the arithmetic average of the volume-weighted average price of NAB stock sold on ASX and Cboe from 19 May to 30 May.
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A recap on NAB's quarterly report
For the six months ended 31 March, NAB reported net interest income of $8,445 million, up 0.6% compared to the prior corresponding period (pcp).
Other operating income was $1,836 million, up 5.5%.
NAB's operating expenses increased 3% on the pcp to $4,818 million.
The statutory net profit after tax (NPAT) was $3,407 million, down 2.5% on the pcp.
NAB's net interest margin (NIM) was 1.7%, down from 1.72% in the pcp.
Investors appear to be pleased with the report, with NAB shares rising on Wednesday and Thursday.
NAB CEO Andrew Irvine said:
Execution of our refreshed strategy is underway. We are focused on driving much stronger customer advocacy across our Bank, along with greater speed and simplicity, and ongoing modernisation of our technology.
This will support our key priorities of continuing to drive performance in deposits, improving proprietary lending, and growing business banking.
Should you buy NAB shares?
Top broker Macquarie says NAB is its preferred banking stock.
However, the broker retains just a neutral rating on NAB and expects the share price to fall from here.
Macquarie's 12-month price target on NAB is $35.
In a new note, Macquarie said NAB's headline 1H FY25 result beat expectations due to lower impairments.
The broker added:
NAB has shown early signs of progress on key priorities, delivering stronger deposit growth and stabilising proprietary mortgages.
However, with competition stepping up in business, margins are likely to remain under pressure.
Notwithstanding this, we estimate better margin trends for NAB in FY26-27 due to its better relative balance sheet position with respect to margin impact from lower interest rates (cash rate cuts and replicating portfolio impact).
The broker forecasts a dividend cut for NAB shares, commenting:
A high payout ratio, limited further inorganic capital generation, and only ~30bps of surplus capital, suggest a likely dividend cut in 1H27.
