When it comes to investing, there's nothing better than finding ASX shares that offer a combination of solid gains and a big dividend yield.
The good news is that there could be one such share hidden in plain sight – National Australia Bank Ltd (ASX: NAB).
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Can NAB shares deliver the goods?
According to a recent note out of Goldman Sachs, its analysts see decent upside and a generous dividend yield coming for investors over the next 12 months.
The note reveals that the broker has a buy rating and a $30.51 price target on the banking giant's shares. This implies a potential upside of approximately 8% for investors from current levels.
In addition, the broker is forecasting a fully franked dividend of $1.66 per share in FY 2023 (as well as FY 2024 and FY 2025). This equates to an annual dividend yield of 5.9%.
Combined, this means that NAB shares would provide a total return of approximately 14% for investors between now and this time next year.
Why buy this bank share?
Goldman likes NAB due to its exposure to commercial lending, which it feels will fare better in the current environment. The broker explains:
We reiterate our Buy on NAB given: i) we see volume momentum over the next 12 months as favouring commercial volumes over housing volumes, and we believe NAB provides the best exposure to this thematic, ii) NAB has delivered the highest levels of productivity over the last three years and its investments continue to yield benefits (A$400 mn expected in FY23E), which we think leaves it well positioned for an environment of elevated inflationary pressure, iii) NAB's returns improvement vs. peers is not reflected in valuations, and vi) our revised TP offers c. 14% TSR.
