Here's the NAB dividend forecast through to 2028
Person holding Australian dollar notes, symbolising dividends.
National Australia Bank Ltd (ASX: NAB) shares were on form last week.
The banking giant’s shares rose 2% over the period to end at $34.40.
This compares favourably to the performance of the ASX 200 index, which was up 0.2% of the week.
Why did NAB shares outperform?
Investors were buying NAB shares after responding positively to the release of its half-year results for FY 2024.
As a reminder, for the six months ended 31 March, NAB reported a 0.9% decline in net operating income to $10,138 million and a 12.8% decline in cash earnings to $3,548 million.
While on paper this may not look overly good, it was largely in line with expectations. The consensus estimate was for cash earnings of $3,553 million for the half.
Despite this earnings decline, the NAB board elected to increase its interim dividend by 1.2% year on year to a fully franked 84 cents per share. This was ahead of the market’s expectations for an 83 cents per share.
The good news is that it isn’t too late to get hold of this latest NAB dividend. It is due to trade ex-dividend on next week on 7 May. After which, the bank will be paying it to eligible shareholders on 3 July.
What’s next for the NAB dividend?
In response to the bank’s half-year results, the team at Goldman Sachs has been busy updating its financial model and estimates for the coming years. This includes increasing its NAB dividend estimates.
Looking ahead, the broker now expects the bank to declare an 85 cents per share fully franked final dividend in November. This will bring its total dividends for FY 2024 to $1.68 per share.
Based on the latest NAB share price, this will mean an attractive dividend yield of 4.9% for investors.
In FY 2025, the broker expects the NAB board to keep its dividend on hold and is forecasting another $1.68 per share fully franked dividend. This will mean another 4.9% dividend yield for the bank’s shareholders.
And in FY 2026 its analysts have pencilled in yet another $1.68 per share fully franked dividend for shareholders. This will mean a third 4.9% dividend yield in a row based on its current share price.
Finally, if you like consistency then you will be pleased to learn that Goldman expects this to remain the case for the NAB dividend again in both FY 2027 and FY 2028.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. 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.