Here's everything you need to know about the NAB dividend
Looking to grab the National Australia Bank Ltd (ASX: NAB) dividend that was declared this morning?
Get in line!
Just 60 minutes after the opening bell, there were already 6,200 trades placed on NAB shares valued at more than $59 million. With investors leaning towards the optimistic side, the NAB share price is up 1.2% at the time of writing, trading at $34.20.
As many passive income investors will know, the big four S&P/ASX 200 Index (ASX: XJO) bank stock has paid two annual, fully franked dividends every year for more than 10 years running.
The NAB dividend payout ratio is guided by a range of 65% to 75% of the bank’s cash earnings, “subject to board determination based on circumstances at the relevant time”.
This morning, the big four bank released its half-year results for the six months ending 31 March.
Here’s everything you need to know about the NAB dividend.
The NAB dividend
Highlights from NAB’s half-year results included net operating income of $10.14 billion, down 0.9% year on year. Cash earnings fell 12.8% to $3.55 billion.
But management pleased passive income investors by lifting the interim NAB dividend by 1.2% from last year to 84 cents a share.
At the recent NAB share price of $33.92, that represents a fully franked pending yield of 2.5% from the interim dividend alone. NAB also paid a final dividend of 84 cents a share on 15 December. That sees the bank trading on a fully franked yield (partly trailing, partly pending) of 5.0%.
For investors looking to take advantage of the power of compounding, NAB’s dividend reinvestment plan (DRP) is in effect.
Eligible shareholders can participate in the DRP for up to five million shares. Management expects to satisfy the DRP in full via an on-market purchase of shares.
If you’re looking to grab this payout, you’ll need to own shares at market close on Monday, 6 May. NAB shares trade ex-dividend on Tuesday, 7 May.
Eligible investors can expect to receive the latest payout on 3 July.
The extra $1.5 billion NAB share buy-back
Atop announcing half-year results and the NAB dividend today, management also announced an additional $1.5 billion on-market share buyback.
The bank said that as at 31 March, it had completed $1.3 billion of the $1.5 billion buyback commenced in August.
The newly increased buyback is expected to be undertaken over the next 12 months, starting today. That now totals $1.7 billion, as $200 million of the initial buyback remains.
“Our continued focus on capital generation supports our objective to reduce our share count over time through on-market buybacks while maintaining a strong capital position.” NAB CEO Andrew Irvine said.
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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. 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 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.