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How much is the NAB dividend worth now?

National Australia Bank Ltd (ASX: NAB) has just announced its latest dividend for July. Here’s how much it’s worth as a yield going forward
The post How much is the NAB dividend worth now? appeared first on The Motley Fool Australia. –

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National Australia Bank Ltd. (ASX: NAB) is the latest of the ASX banks to report its half-year earnings. NAB did just that this morning, which we covered earlier today. Although the third-largest ASX bank reported a 94.8% surge in cash earnings to $3.34 billion for the 6 months ending 31 March 2021, the market is not reacting well today. The NAB share price is, at the time of writing, down a hefty 3.14% to $26.51, well below its new 52-week high that we saw earlier in the week. That makes it by far the worst performing ASX bank today, although the other 3 have all given up some value on the markets as well. But NAB’s report also came with a dividend announcement. And since many (if not most) ASX investors hold the banks for dividend income, this will be of keen interest.

So NAB shares currently offer a trailing dividend yield of 2.26% on current pricing. That’s built off of NAB’s past two dividend payments for 2020. Unlike Westpac Banking Corp (ASX: WBC), NAB managed to fund two dividend payments last year. However, those dividends were not what investors would be used to from NAB. The bank paid an interim dividend of 30 cents per share, fully franked, in July last year. This was supplemented by a final dividend, also 30 cents fully franked, in December.

Just for some context, in 2019 NAB paid out 2 dividends of 83 cents a share. In 2018, it was 2 lots of 99 cents per share.

NAB’s got a brand new dividend

So NAB’s newly announced interim dividend for 2021 will be 60 cents per share, fully franked. It will be paid out on 2 July, with an ex-date of 14 May. 60 cents isn’t quite back up to NAB’s pre-pandemic dividend levels. But it’s also a substantial improvement on what was on offer last year.

But how much is this dividend worth to investors? Well, if we combine this new 60 cents per share payout with NAB’s previous dividend, we get an annual payment of 90 cents per share. That would equate to a trailing dividend yield of 3.4%, or 4.85% grossed-up with full franking. If we take the new payment of 60 cents per share and annualise it, NAB would offer a forward yield of 4.53% today, or 6.47% grossed-up.

That amount isn’t quite as high as what Australia and New Zealand Banking GrpLtd‘s (ASX: ANZ) newly-announced dividend is worth. But it does pip Westpac’s new payout.

On the current NAB share price, the ASX bank has a market capitalisation of $87.35 billion and a price-to-earnings (P/E) ratio of 24.4.

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Returns As of 15th February 2021

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Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post How much is the NAB dividend worth now? appeared first on The Motley Fool Australia.

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