National Australia Bank Ltd's Dividend Analysis
In This Article:
Exploring the Sustainability and Performance of Dividends
National Australia Bank Ltd (NABZY) recently announced a dividend of $0.27 per share, payable on 2024-07-10, with the ex-dividend date set for 2024-05-10. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into National Australia Bank Ltd's dividend performance and assess its sustainability.
What Does National Australia Bank Ltd Do?
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National Australia Bank is the most business-focused of the four major banks, holding the largest share of business loans and the number-three spot in home loans. National Australia Bank is currently the second-largest bank by market capitalization, with the franchise covering consumer, small business, corporate, and institutional sectors. Under the UBank brand the bank also owns one of Australia's largest digital-only banks. Offshore operations in New Zealand round out the group.
A Glimpse at National Australia Bank Ltd's Dividend History
National Australia Bank Ltd has maintained a consistent dividend payment record since 1989. Dividends are currently distributed on a bi-annual basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down National Australia Bank Ltd's Dividend Yield and Growth
As of today, National Australia Bank Ltd currently has a 12-month trailing dividend yield of 4.93% and a 12-month forward dividend yield of 4.88%. This suggests an expectation of decreased dividend payments over the next 12 months.
Over the past three years, National Australia Bank Ltd's annual dividend growth rate was 12.50%. Extended to a five-year horizon, this rate decreased to -5.70% per year. And over the past decade, National Australia Bank Ltd's annual dividends per share growth rate stands at -4.80%.
Based on National Australia Bank Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of National Australia Bank Ltd stock as of today is approximately 3.68%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2024-03-31, National Australia Bank Ltd's dividend payout ratio is 0.77, which may suggest that the company's dividend may not be sustainable.