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Fortescue vs National Australia Bank shares: Which blue chip is the better buy?
When it comes to ASX blue chips, Fortescue Ltd (ASX: FMG) and National Australia Bank Ltd (ASX: NAB) are two household names that regularly appear on investor watchlists. Both deliver fully-franked dividends, boast huge market caps, and are pillars of the local stock market—yet they couldn't be more different in what they do or how they've performed recently. With volatility hitting miners and banks alike, here's my take on Fortescue vs National Australia Bank shares today.
The case for Fortescue
Fortescue is a mining powerhouse, best known for its iron ore operations in the Pilbara region of Western Australia. The company operates major mining hubs and some of the most efficient rail and port infrastructure in the game. According to its most recent public description, Fortescue is now ranked as the world's fourth largest iron ore producer, which gives it serious scale and bargaining power.
Three fundamentals really stand out to me for Fortescue shares right now:
- Dividend yield: It boasts a fat 6.64% yield (fully franked), one of the highest among ASX blue chips.
- P/E ratio: At 12.25, Fortescue trades on a much lower price-to-earnings multiple than most large ASX companies.
- YTD performance: Its year-to-date return is a disappointing -21.2%, showing it's faced real headwinds in 2026 so far.
Fortescue's dividends have been consistently fully franked, and the company has a history of paying out special dividends when iron ore prices have been strong. However, as a miner, its fortunes are closely tied to iron ore prices and China's demand for steel.
The case for National Australia Bank
National Australia Bank is one of the "Big Four" banks, with a huge network across Australia and New Zealand. NAB delivers a broad suite of banking services, from retail and business banking to wealth management and institutional finance. Thanks to its established brand and extensive branch network, NAB is a pillar of the local financial system and a favourite with steady-income investors.
Here are the top points for NAB:
- Dividend reliability: Its current yield is 4.35% (fully franked), not as high as Fortescue but underpinned by a long track record of steady and uninterrupted payouts.
- P/E ratio: NAB trades on a P/E of 19.56, which is meaningfully higher than Fortescue's but still reasonable for a major bank.
- Market cap: It dwarfs Fortescue with a $122.05 billion market cap, reflecting NAB's position as one of the largest companies on the ASX.
- YTD performance: NAB shares are only down 5.6% so far in 2026, which is much steadier than what we've seen from Fortescue.
NAB's dividends are fully franked, and the payout has been remarkably consistent over the past decade-plus, weathering economic turbulence and regulatory changes much better than most cyclical stocks.
Valuation comparison
Here's how these giants stack up on the key numbers:
| Fortescue | National Australia Bank | |
|---|---|---|
| Market Cap | $50.62 billion | $122.05 billion |
| P/E Ratio | 12.25 | 19.56 |
| Dividend Yield | 6.64% (100% franked) | 4.35% (100% franked) |
| Earnings Per Share (EPS) | 0.931 | 2.000 |
| Dividend Per Share | 1.08 | 1.70 |
| YTD Return | -21.2% | -5.6% |
Note: National Australia Bank's P/E ratio is quite a bit higher than Fortescue's, but keep in mind that mining and banking are completely different sectors with different typical valuations. Also, Fortescue's reported P/E and EPS figures suggest a lower implied share price than spot prices, possibly reflecting the difference between underlying or forward earnings and reported EPS.
Recent share price momentum
Comparing recent share price performance up to 30 September 2026:
- Fortescue: Closed at $16.44, up 1.04% on the day but still down 21.2% for the year to date.
- National Australia Bank: Closed at $39.15, up 0.10% on the day and down just 5.6% year to date.
Over the past few weeks, both stocks have seen short bursts of volatility, with Fortescue buffeted by commodity swings and NAB supported by steady, if unspectacular, trading.
Which is the better buy?
If I had to pick one blue chip from these two today, I'd lean toward National Australia Bank. Yes, Fortescue's dividend yield is higher and its valuation appears cheaper on a P/E basis, but that hefty yield comes at the price of much greater volatility—and its share price shows it, down over 21% for the year so far. NAB, in contrast, offers a steadier ride with fully franked dividends, strong brand strength, and much less price downside over 2026.
Fortescue is attractive if you believe iron ore has further to run or want maximum yield while accepting serious swings along the way. But for my money—and especially for investors focused on stability, income reliability, and blue chip defensiveness—NAB looks the safer bet for the current market environment.
