The NAB dividend forecast has grabbed my attention!

This ASX expert reckons NAB's dividends will only get bigger from here.

| More on:
Smiling man holding Australian dollar notes, symbolising dividends.

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

  • ASX 200 bank shares are a popular choice for ASX income investors and have been for decades
  • NAB is no exception to his rule, with this bank offering a dividend yield of over 6% today
  • But one ASX broker thinks that NAB could be yielding even more in just a few months

As an ASX 200 big four bank share, National Australia Bank Ltd (ASX: NAB) has always been a popular choice for dividend investors. Bank shares are well-known for showering their shareholders with dividend income, and NAB is no different.

As it stands today, the NAB share price offers a dividend yield of 6.09%. That comes fully franked as well, which could boost this yield to a grossed-up 8.7%.

Yet this yield, like all trailing dividend yields, reflects the past, not the future. It is derived from NAB's past two dividend payments – the final dividend worth 78 cents per share from December, and the interim dividend worth 83 cents per share that will come in July (the ex-dividend date has passed, so it is prudent to include it in the current yield).

However, there is no guarantee that investing $1,000 into NAB shares today will bag you $60.60 in dividend income over the next 12 months. That depends on NAB's next interim and final dividends.

Well, these upcoming payments have caught my attention, thanks to some insights from ASX broker Goldman Sachs. As we covered here last week, Goldman Sachs has come out with a buy rating for the NAB share price, together with a 12-month share price target of $30.39. That would represent a 16% rise over the current NAB share price. But that's not what excites me the most about Goldman's analysis.

The broker is also expecting that the bank will be able to initiate additional share buyback schemes, and is expecting big things when it comes to the NAB dividend.

ASX broker forecasts even more dividend hikes from NAB shares

Goldman has pencilled in a total of $1.66 in dividends per share for both FY2023 and FY2024. That implies that NAB's next final dividend (due this December) will come in at 83 cents per share, as will the following two payments.

If that does indeed come to pass, it would give the NAB share price a forward dividend yield of 6.25% all the way out to the end of FY2024 at the current share price.

That is a juicy yield by any measure. Not only does it well and truly trump NAB's larger rival Commonwealth Bank of Australia (ASX: CBA)'s current yield of 4.25%, it well exceeds any yield available from a savings account or term deposit right now (even without factoring that full franking). And that includes NAB's own products.

Let's hope Goldman is on the money here.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. Motley Fool contributor Sebastian Bowen has positions in National Australia Bank. 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 Scott Phillips.

More on Bank Shares

A young woman sits at her desk in deep contemplation with her hand to her chin while seriously considering information she is reading on her laptop.
Dividend Investing

Are CBA shares still a good buy today for passive income?

Looking to earn passive income from ASX dividend stocks? Here’s my take on CBA shares.

Read more »

Shocked office worker staring at computer screen with colleagues working in the background.
Bank Shares

The ASX bank share beating CBA in 2025

Many investors might not realise this smaller bank stock is leading the pack this year. 

Read more »

man thinking about whether to invest in bitcoin
Bank Shares

Here's what needs to happen for the CBA share price to try and reach $200

What could drive the CBA share price higher?

Read more »

A young woman sits at her desk in deep contemplation with her hand to her chin while seriously considering information she is reading on her laptop.
Bank Shares

Why now could be an opportune time to sell CBA shares

A leading expert offers his verdict on the outlook for CBA shares.

Read more »

A man holding a cup of coffee puts his thumb up and smiles while at laptop.
Bank Shares

The Westpac share price is a buy – UBS

The broker is optimistic on Westpac shares.

Read more »

Bank building with the word bank on it.
Bank Shares

The biggest buyers and sellers of ASX 200 bank stocks revealed

Macquarie breaks down who’s been buying and who’s been selling the ASX 200 bank stocks.

Read more »

A young woman sits with her hand to her chin staring off to the side thinking about her investments.
Resources Shares

Should I switch my ASX 200 banking stocks for ASX 200 miners before earnings season?

The ASX 200 Index is dominated by Australia's bank and materials/mining sectors, which together account for around half of the…

Read more »

A man sits in contemplation on his sofa looking at his phone as though he has just heard some serious or interesting news.
Bank Shares

Here's when Westpac says the RBA will now cut interest rates

The RBA surprised everyone by keeping rates on hold last week. So, when will the next cut happen?

Read more »