Shares of National Australia Bank Ltd (ASX: NAB) have rallied 13.5% so far in 2015.
That compares to the S&P/ASX200's (ASX: XJO) (Index: ^AXJO) return of just 7.4%.
NAB's share price outperformance comes despite the bank announcing a near 10% fall in profits for financial year 2014 and a mountain of write-offs and negative media coverage surrounding its UK banking subsidiaries, Clydesdale and Yorkshire.
Worse still, more write-offs could be expected after the UK parliament's Treasury Select Committee's recent probe into the selling of potentially unconscionable interest rate hedging products to small businesses.
If investors couple its recent share rise, poor track record and expensive valuation together, now doesn't appear to be a good time to buy NAB shares – no matter how good its 5.4% fully franked dividend looks.
Instead it could be time to look at other – less obvious – dividend stock ideas. Whilst their share prices may be more volatile than the big four banks, they could prove to be even more rewarding investments over the long-term.
For example G8 Education Ltd (ASX: GEM) shares are currently trading on a trailing dividend yield of 6.9% with full franking. The childcare centre owner and operator has been a standout performer over the past few years, but despite recently announcing a stellar profit result, its share price has tumbled 35% in the past six months.
Another prominent ASX stock to be sold down in recent times is Woolworths Limited (ASX: WOW). After going ex-dividend today, the supermarket giant fell to its lowest price in over two years. However the good news for investors focused on holding their shares over the long-term, is that Woolies 4.86% fully franked dividend is reliable. In the current low interest rate environment, it deserves a second look.
