NAB shares: A top tip for passive income?

Here's how much passive income NAB shares can give you…

| More on:
A woman sits at her computer with her hand to her mouth and a contemplative smile on her face as she reads about the performance of Allkem shares on her computer

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The ASX 200 big four banks are well-known dividend payers
  • That includes National Australia Bank
  • One broker tips NAB's dividends will grow into the future

When you ask an investor about buying ASX 200 shares for passive income from dividends, the big four banks probably come to mind. After all, ASX 200 bank shares, like National Australia Bank Ltd (ASX: NAB), have paid out some of the ASX's heaviest dividends for decades.

But are NAB shares really a top pick for passive income in 2023?

Well, let's start at the start.

So NAB shares have paid out two dividends over the past 12 months, as most ASX 200 dividend shares are wont to do. The first was the July interim dividend worth 73 cents per share. The second was the final dividend that investors received in December, worth 78 cents per share. Both dividends came fully franked, as is typical with NAB.

Both of these dividends were healthy increases over 2021's commensurate dividends. This total of $1.51 in dividends per share over the past 12 months gives NAB shares a trailing dividend yield of 4.7% (or 6.71% grossed-up with the full franking) today.

This yield represents $4.70 in passive income per year in dividends for every $100 invested.

Now, that's actually on the lower end of the scale when it comes to the other big four ASX banks.

For example, Westpac Banking Corp (ASX: WBC) shares offer investors a trailing dividend yield of 5.21% at current pricing. Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares are sitting on a yield of 5.62% right now.

Only the Commonwealth Bank of Australia (ASX: CBA) share price has a lower dividend yield than NAB's today, at 3.47%.

Are NAB shares an ASX 200 buy for passive dividend income today?

So if NAB at least maintains 2022's dividends in 2023, investors can look forward to at least a 4.7% fully franked dividend yield this year. That's certainly a meaningful source of passive income from this ASX 200 dividend share.

But dividends are never guaranteed on the ASX. So there's no way to know if NAB will really keep its payouts steady this year.

But one ASX broker thinks the bank will.

As my Fool colleague James covered this morning, ASX broker Goldman Sachs has just come out with another buy rating on NAB shares. The broker has given the ASX 200 bank a 12-month share price target of $35.60. If realised, investors will enjoy an upside of more than 11% from capital growth alone from where the shares sit today:

Created with Highcharts 11.4.3National Australia Bank PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

But let's talk about dividends. So Goldman is also predicting that not only will NAB maintain 2022's dividend levels this year, but increase them. The broker is pencilling in a total of $1.66 in dividends per share for FY2023, which rises to $1.73 per share for FY2024.

So at least one ASX expert reckons NAB shares will be able to deliver rising passive income to investors for at least the next year or two. Only time will tell what kind of dividends NAB will end up funding in the future.

But at least one ASX broker is tipping NAB shares as a great source of passive dividend income going forward.

Should you invest $1,000 in Woolworths Group Limited right now?

Before you buy Woolworths Group Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Woolworths Group Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Sebastian Bowen has positions in National Australia Bank. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Bank Shares

A businesswoman on the phone is shocked as she looks at her watch, she's running out of time.
Bank Shares

Want to bag the next Westpac shares dividend? Better be quick…

Westpac will pay an interim dividend of 76 cents per share next month.

Read more »

A man in a suit smiles at the yellow piggy bank he holds in his hand.
Bank Shares

After its result, what does Macquarie think Westpac shares are worth?

Let's see what the broker is saying about Australia's oldest bank.

Read more »

Modern accountant woman in a light business suit in modern green office with documents and laptop.
Bank Shares

What could Westpac's results mean for CBA shares?

Westpac recently announced its FY25 half-year result.

Read more »

A woman works on her desktop and tablet, having a win with crypto.
Bank Shares

Should new investors spend their first $5,000 on the big 4 banks?

New to investing? You might be considering one of Australia’s major banks as your first investment. 

Read more »

Woman calculating dividends on calculator and working on a laptop.
Bank Shares

Buying the dip: $10,000 invested in Westpac and CBA shares at April's lows is now worth…

Investors would have done well to follow Warren Buffett’s advice to be greedy on Westpac and CBA shares in early…

Read more »

Lines of codes and graphs in the background with woman looking at laptop trying to understand the data.
Earnings Results

Westpac share price sinks on half-year results miss

Let's see how the big four bank performed during the first half.

Read more »

A man sits in deep thought with a pen held to his lips as he ponders his computer screen with a laptop open next to him on his desk in a home office environment.
Bank Shares

Why does Macquarie think the big 4 ASX bank shares are 'on borrowed time'?

With Australian interest rates likely to fall, the banks face compressed margins in the medium term.

Read more »

Bank building in a financial district.
Bank Shares

What happened with the big four ASX 200 bank stocks in April?

CBA led the charge among the ASX 200 bank stocks in April. But why?

Read more »