National Australia Bank Ltd (ASX: NAB) is one of Australia's largest banks and a familiar name to investors.
Its dividend will naturally attract plenty of attention, but I think there are even more reasons to take a closer look at the bank today.
Here are three reasons I would be comfortable investing $10,000 in NAB shares.
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An attractive fully franked dividend
NAB's dividend is of course one of the main reasons I would consider investing today.
According to CommSec consensus estimates, the bank is expected to pay fully franked dividends of $1.70 per share in FY26 and $1.72 per share in FY27. At a share price of around $42.53, that represents a forward dividend yield of roughly 4% in both years, before the potential benefit of franking credits.
This means that a $10,000 investment, which would buy approximately 235 shares before brokerage, could generate close to $400 in annual cash dividends.
NAB share price valuation looks fair
NAB shares have performed strongly over the past few years, so I would still want to make sure I was paying a sensible price.
Based on the current share price and consensus forecasts, NAB is trading on a PE ratio of approximately 17.5 times FY26 earnings and 16.8 times FY27 earnings.
I think that is a fair valuation for a major Australian bank offering attractive fully franked income and modest earnings growth.
The shares could still come under pressure if bad debts rise, interest margins weaken, or competition intensifies.
However, I would be comfortable accepting those risks at the current valuation. NAB does not need spectacular earnings growth to produce a solid return if it can maintain its dividend and gradually increase profits over time.
Business banking provides another growth avenue
NAB's position in business banking is probably the strongest reason I would choose it over some of its major rivals.
Australian business lending increased by 5.6% during the first half of FY26, with the bank gaining market share across both small and medium-sized enterprises and the wider business lending market. Business and private banking cash earnings also rose by 12.3% compared with the prior corresponding period.
I like this because the Australian retail banking market remains highly competitive, particularly in home loans, and recent changes to negative gearing and higher interest rates could weigh on the housing market. NAB's business franchise gives it another way to grow without relying as heavily on mortgage lending.
NAB still has plenty of exposure to Australian households and housing. But its strength in business banking provides an additional earnings engine that I believe could become increasingly valuable.
Foolish takeaway
I would be comfortable investing $10,000 in NAB shares at current levels.
The bank can provide income today while still offering some potential for earnings and dividend growth. Its business banking position also gives NAB a valuable point of difference in a difficult retail banking environment.
I think it could be the type of investment that quietly delivers solid returns over many years.
