As a big four ASX bank share, as well as one of the largest stocks on the S&P/ASX 200 Index (ASX: XJO), National Australia Bank Ltd (ASX: NAB) is a popular share for Australian investors to own. Some may own it in the hopes that NAB shares will compound at a high rate over time, building real wealth for investors.
But I think it's fair to say that most investors who buy NAB stock do so in the hope of receiving the fat, fully-franked dividends that this bank is famous for.
Like most ASX bank shares, and particularly the other big four banks, NAB has a long and successful history of paying out substantial dividend payments to its shareholders. In NAB's case, these have almost always come with full franking credits attached.
As it happens, NAB is looking particularly pleasing compared to its banking peers, from an income perspective at least, at the present moment. The bank currently offers the second-highest trailing dividend yield of the big four, only behind ANZ Group Holdings Ltd (ASX: ANZ). And since ANZ no longer seems to be able to pay fully-franked dividends, we can say NAB is looking comparable at worst.
At recent pricing, NAB was trading on a trailing dividend yield of just under 4.7%. That's well ahead of Westpac Banking Corp (ASX: WBC) and several leagues above Commonwealth Bank of Australia (ASX: CBA).
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NAB shares: What's in store for dividend investors?
This yield comes from the two dividend payments NAB has made to investors over the past 12 months. The first was last year's July interim dividend of 85 cents per share. The second, the final dividend from December, was also worth 85 cents per share. Both dividends came fully franked. NAB has actually already traded ex-dividend for its July interim dividend for 2026. However, that payment, due to be paid out on 2 July, will be worth 85 cents per share too, meaning our yield remains the same.
However, that all reflects the past and present. What of the future? What should investors who spend $10,000 on NAB shares today expect to receive over 2027?
Well, we can't know with certainty what kind of income NAB will pay out until it reveals what its 2027 dividend will look like. We can, however, speculate.
At recent pricing, $10,000 will get an investor about 275 NAB shares, give or take. Last month, my Fool colleague Tristan looked at some predictions regarding NAB's dividends. He found that analysts are pencilling in a modest dividend rise next year, with NAB predicted to fork out a total of $1.705 for its FY 2026, rising to $1.73 per share for FY 2027. If that's true, it would mean our investor with 275 NAB shares could look forward to just under $469 in dividend income for FY 2026, rising to about $476 for FY 2027. That would equate to annual yields of 4.69% and 4.76%, respectively.
Of course, those are just predictions. We'll have to wait until next year to get to the bottom of NAB's 2027 dividends. But no doubt shareholders will be hoping for that modest pay rise.
