Are NAB shares a buy, hold, or sell this month?

National Australia Bank Ltd (ASX: NAB) is an ASX bank share that can divide opinion.

It is a major bank with a large customer base, an attractive dividend profile, and a strong position in business banking.

But investors also need to think about the economy, bad debts, mortgage competition, and whether bank valuations leave enough room for upside.

So, are NAB shares a buy, hold, or sell this month?

The NAB share price looks reasonable

The NAB share price is currently around $39.59.

That compares with a 52-week range of $35.48 to $49.45, meaning the shares are still trading well below their recent high.

That does not automatically make NAB a bargain. But I do think the pullback has made the valuation more appealing for investors looking at the big banks.

Using CommSec consensus estimates, NAB is expected to generate earnings per share of $2.43 in FY26 and $2.53 in FY27.

Based on the current share price, that puts the bank on a price-to-earnings ratio of around 16.3 times FY26 earnings and 15.7 times FY27 earnings.

I think that looks reasonable for a major Australian bank with NAB's market position.

The dividend case is solid

NAB also offers an attractive income profile.

Consensus dividend forecasts are $1.70 per share in FY26 and $1.72 per share in FY27.

At the current share price, that implies forward dividend yields of roughly 4.3% and 4.35%.

That is not the highest yield investors can find on the ASX, but I think it is attractive when paired with the scale and profitability of a major bank.

Dividends are never guaranteed, especially in banking. Credit quality, regulation, capital requirements, and economic conditions all matter. But for investors wanting passive income from ASX shares, I think NAB's forecast yield is strong enough to deserve attention.

Why I'd call NAB a buy

My verdict is that NAB shares are a buy this month.

The main reason is the bank's business banking strength.

Retail banking is a challenging market. Mortgage competition remains intense, deposits are valuable, and households are still dealing with cost-of-living pressure.

NAB's business banking exposure gives it a different angle. Businesses need loans, deposits, payment services, transaction accounts, and working capital support. Those relationships can be deeper and more valuable than a single home loan.

That does not remove economic risk. If conditions weaken, business confidence and credit quality could come under pressure.

But I like NAB's position in a part of banking where relationships, scale, and service still count.

Foolish takeaway

I think NAB shares are a buy this month.

The share price remains well below its 52-week high, the valuation looks reasonable on consensus earnings forecasts, and the dividend yield is attractive.

The banking sector still has risks, so I would not expect a perfectly smooth ride. But I think NAB's business banking strength gives it a useful edge in the current environment.

For investors looking for ASX bank exposure, I would be happy to buy NAB shares at current levels.