The entire banking sector offers extremely lucrative dividend yields. It’s easy to see why bank stocks are a favorite amongst yield investors. This article will report in detail, the NAB Dividend.
Over the past decade, NAB shareholders have enjoyed on average 8.94% per year from the dividend.
NAB Dividend Summary
|DPS (Trailing 12-Month)||$0.90|
|Gross DPS (Trailing 12-Month)||$1.2857|
NAB Dividend Dates 2021
|Results Reporting||6 May 2021||9 Nov 2021|
|Declaration date||6 May 2021||9 Nov 2021|
|Ex-div date||13 May 2021||15 Nov 2021|
|Record Date||14 May 2021||16 Nov 2021|
|Pay date||2 July 2021||15 Dec 2021|
NAB Dividend History Graph
The Banking sector has been one of the favorites for investors over the years due to its decent returns and solid dividend history. It’s no surprise why the sector makes up around 30% of the entire market index. Over the past decade, big banking stocks have managed to maintain a steady flow of income for investors, with an exception of the COVID dip.
NAB typically announces a dividend with the release of its half-year results in May and full-year results in November as seen in their financial calendar. NAB Dividends are typically paid twice a year, in July (interim dividend) and December (final dividend).
NAB has paid biannual dividends every year since 1982. Including the COVID-19 recessionary period. Most dividends have been fully franked. They also offer a Dividend Reinvestment Plan (DRP). We did see them reduce franking to 80-90% from 2005 to 2006.
NAB Dividend Yield Comparison
The current NAB yield of 4.64% far exceeds the Average Term Deposit rate of 0.4%
Net NAB Dividend Yields Over Time
We can see NAB’s net dividend yield has averaged a rate of around 7%. From this, we can see NAB’s current net yield of 3.25% is below its historic average.
We can see the yield spike in 2020 due to a significant share price reduction. This yield tapered off as the share price increased, but earnings were still impacted. We are expecting earnings to return in 2021.
NAB Dividend Payout Ratio and Policy
A companies dividend payout ratio is the ratio of the total dividend sum paid out relative to the net income of the company. It is the percentage of earnings paid to shareholders in dividends.
Based on current averages NAB’s payout ratio is 57%, which we expect to increase in the coming years to a ratio of 72%.
So far in 2021, we have seen NAB payout its interim dividend of 60 cents.
In last year’s FY20 results NAB paid out 60 cents per share to investors. This comprised an interim dividend of $0.3 and a final dividend payment of $0.3 which was fully franked.
We note in this report NAB announced a payout ratio of 48%, in line with AHPRAs guidelines. These guidelines are based upon maintaining liquidity in the current recessionary period.
“Banks should seriously consider deferring decisions on the appropriate level of dividends until the outlook is clearer”
APRA has indicated that for the remainder of the calendar year boards should:
- seek to retain at least half of their earnings when making decisions on capital distributions (and utilise dividend reinvestment plans and other initiatives to offset the diminution in capital from capital distributions where possible)
With APRA and RBNZ easing bank dividend restrictions, payout ratios are again increasing
The amount that is not paid to shareholders is retained by the company to pay off debt or to reinvest in core operations. It is sometimes simply referred to as the ‘payout ratio.’
NAB Share Price
NAB Dividend Policy
Future Payout Ratio: 65-75%
NAB has no recorded Dividend Policy. From past results, the group seems to target a payout ratio of 70-80%, which is common amongst the banks. They also appear to target fully-franked dividends.
“Future dividends to be guided by a payout ratio range of 65-75% of cash earnings, subject to Board determination based on circumstances at the relevant time”NAB HY21 Results
With the commencement of the 2021 calendar year, AHPRA’s 50% payout guideline is no longer current, as such, we will expect NAB to return to a more normalized payout ratio.
When will my NAB Dividends be Paid?
The Bank typically announces a dividend with the release of its half-year results in May and full-year results in November. Dividends are typically paid twice a year, in July (interim dividend) and December (final dividend). Payment dates are listed on the financial calendar.
NAB Dividend Reinvestment Plan (DRIP)
A DRIP or dividend reinvestment plan allows investors to automatically reinvest their dividends for additional shares in the company. Using this method, the investor will still receive the franking credit and will still be taxed on the cash value of their dividend.
- In Computershare it’s as simple as going ‘my profile’- ‘Reinvestment plans’ and selecting the company and electing to participate in full or partially. That is either the entire amount or a partial amount of your dividend is reinvested.
- On Link you simply click view details of the company of interest and update it in the ‘payments and tax’ section.
For more information check out our ASX DRIP VS NON-DRIP Guide
The Return of Dividends
Following the loss of earnings, we saw companies cut dividends across the board, leading to a massive reduction in the average dividend yield across the market. Now averaging below 4%. We saw the 4 big banks, which are known as massive dividend stocks, cut their yield by around 50% in 2020.
We saw the big four banks, cut dividends by around 50% in 2020
Following the return of earnings, we are expecting to see dividends returning to very attractive yields. Though we can’t expect past payout ratios, as many companies will elect to hold a large amount of cash on hand to strengthen their balance sheet against future uncertainties.
In 2021 we are expecting to see the big banks return more than $30 Billion to shareholders.
Across the market, we are expecting to see payout ratios increase by more than 10%. Which will have a big impact on the average yield rate. We are expecting to see the big banks return more than $30 Billion to shareholders.
NAB Share Buy-Back
In July NAB announced an on-market buy-back of up to $2.5 billion of ordinary shares.
NAB’s strong financial performance, combined with the divestment of MLC Wealth, has created an opportunity for NAB to reduce our surplus capital while retaining a strong balance sheet during these uncertain times.
NAB continues to operate well above APRA’s Unquestionably Strong benchmark of 10.50%, with a reported CET1 capital ratio of 12.37% at Level 2 and 12.40% at Level 1 as at 31 March 2021.
The $2.5 billion on-market buy-back will reduce the CET1 capital ratio at Level 2 by around 60 basis points.
What is a Buy-Back?
A share repurchase is where a company will buy back its shares from investors. This can be completed one of two ways; via an on-market buyback or off-market buyback.
In the on-market method, the company will directly go to the market and repurchase their shares from those selling, as any regular investor would.
The company will then either cancel the shares or hold them, so as they are not publicly traded. The EPS of the company will be artificially raised as the formula earnings/shares have been altered whereas the number of shares PE may temporarily decrease due to an increase in EPS. Learn more about Share Buy-Backs Here.
NAB Dividend History
|Payment date||Ex-dividend date||Dividend||Franking|
|2021 Interim||2 July 2021||13 May 2021||60 cents||100|
|2020 Final||10 December 2020||12 November 2020||30 cents||100|
|2020 Interim||3 July 2020||1 May 2020||30 cents||100|
|2019 Final||12 December 2019||14 November 2019||83 cents||100|
|2019 Interim||3 July 2019||14 May 2019||83 cents||100|
|2018 Final||14 December 2018||8 November 2018||99 cents||100|
|2018 Interim||5 July 2018||15 May 2018||99 cents||100|
|2017 Final||13 December 2017||9 November 2017||99 cents||100|
|2017 Interim||5 July 2017||16 May 2017||99 cents||100|
|2016 Final||13 December 2016||4 November 2016||99 cents||100|
|2016 Interim||5 July 2016||17 May 2016||99 cents||100|
|2015 Final||15 December 2015||5 November 2015||99 cents||100|
|2015 Interim||3 July 2015||15 May 2015||99 cents||100|
|2014 Final||16 December 2014||7 November 2014||99 cents||100|
|2014 Interim||8 July 2014||14 May 2014||99 cents||100|
|2013 Final||18 December 2013||7 November 2013||97 cents||100|
|2013 Interim||16 July 2013||30 May 2013||93 cents||100|
|2012 Final||18 December 2012||9 November 2012||90 cents||100|
|2012 Interim||16 July 2012||31 May 2012||90 cents||100|
|2011 Final||19 December 2011||10 November 2011||88 cents||100|
|2011 Interim||6 July 2011||2 June 2011||84 cents||100|
|2010 Final||17 December 2010||12 November 2010||78 cents||100|
|2010 Interim||8 July 2010||4 June 2010||74 cents||100|
|2009 Final||17 December 2009||13 November 2009||73 cents||100|
|2009 Interim||9 July 2009||4 June 2009||73 cents||100|
|2008 Final||17 December 2008||7 November 2008||97 cents||100|
|2008 Interim||10 July 2008||30 May 2008||97 cents||100|
|2007 Final||18 December 2007||16 November 2007||95 cents||100|
|2007 Interim||12 July 2007||1 June 2007||87 cents||90|
|2006 Final||12 December 2006||10 November 2006||84 cents||90|
|2006 Interim||13 July 2006||2 June 2006||83 cents||80|
|2005 Final||19 December 2005||21 November 2005||83 cents||80|
|2005 Interim||13 July 2005||2 June 2005||83 cents||80|
|2004 Final||8 December 2004||15 November 2004||83 cents||100|
|2004 Interim||14 July 2004||7 June 2004||83 cents||100|
|2003 Final||10 December 2003||17 November 2003||83 cents||100|
|2003 Interim||2 July 2003||6 June 2003||80 cents||100|
|2002 Final||11 December 2002||18 November 2002||75 cents||90|
|2002 Interim||3 July 2002||7 June 2002||72 cents||100|
|2001 Final||12 December 2001||19 November 2001||68 cents||100|
|2001 Interim||4 July 2001||8 June 2001||67 cents||100|
|2000 Final||13 December 2000||20 November 2000||64 cents||100|
|2000 Interim||5 July 2000||9 June 2000||59 cents||100|
|1999 Final||15 December 1999||22 November 1999||58 cents||79|
|1999 Interim||21 July 1999||28 June 1999||54 cents||100|
|1998 Final||16 December 1998||19 November 1998||53 cents||100|
|1998 Interim||22 July 1998||25 June 1998||49 cents||100|
|1997 Final||17 December 1997||20 November 1997||49 cents||100|
|1997 Interim||22 July 1997||26 June 1997||45 cents||100|
|1996 Final||22 January 1997||17 December 1996||44 cents||100|
|1996 Interim||10 July 1996||13 June 1996||43 cents||100|
|1995 Final||24 January 1996||43 cents||100|
|1995 Interim||12 July 1995||40 cents||100|
|1994 Final||18 January 1995||39 cents||100|
|1994 Interim||8 July 1994||35 cents||100|
|1993 Final||19 January 1994||26 cents||100|
|1993 Interim||9 July 1993||24 cents||100|
|1992 Final||20 January 1993||23 cents||100|
|1992 Interim||10 July 1992||22 cents||100|
|1991 Final||22 January 1992||23 cents||100|
|1991 Interim||12 July 1991||22 cents||100|
|1990 Final||23 January 1991||29 cents||100|
|1990 Interim||13 July 1990||26 cents||100|
|1989 Final||24 January 1990||25 cents||100|
|1989 Final||24 January 1990||10 cents||100|
|Special||17 March 1989||10 cents||100|
|1989 Interim||14 July 1989||25 cents||100|
|1988 Final||25 January 1989||17 cents||100|
|1988 Final||25 January 1989||18 cents||100|
|1988 Interim||15 July 1988||15 cents||100|
|1987 Final||27 January 1988||12.5 cents||100|
|1987 Interim||10 July 1987||12.25 cents||100|
|1986 Final||23 January 1987||14.5 cents||100|
|1986 Interim||11 July 1986||14.5 cents||100|
|1985 Final||23 January 1986||14 cents||100|
|1985 Interim||12 July 1985||13.5 cents||100|
|1984 Final||14 December 1984||12.5 cents||100|
|1984 Interim||12 June 1984||12.5 cents||100|
|1983 Final||16 December 1983||12 cents||100|
|1983 Interim||27 June 1983||11 cents||100|
|1982 Final||30 December 1982||12 cents||100|
|1982 Interim||25 June 1982||11 cents||100|
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