National Australia Bank (ASX:NAB) - Share price, News & Analysis

Q: What is the Fair Price of NAB when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

NAB (A$28.81) is trading below our estimate of [[fair value]] (A$46.02)

NAB fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	2/6
Past Performance	3/6
Financial Health	6/6
Dividends	3/6

NAB Stock Overview

National Australia Bank Limited provides financial services to individuals and businesses in Australia, New Zealand, and internationally.

Rewards

Trading at 37.4% below our estimate of its fair value

Earnings are forecast to grow 3.83% per year

Earnings grew by 32.2% over the past year

Trading at good value vs. industry average Price-To-Earnings ratio

Risk Analysis

High level of non-cash earnings

Unstable dividend track record

National Australia Bank Competitors

Westpac Banking

ASX:WBC

AU$72.2b

Australia and New Zealand Banking Group

ASX:ANZ

AU$68.1b

Commonwealth Bank of Australia

ASX:CBA

AU$153.8b

BSP Financial Group

ASX:BFL

AU$2.3b

Price History & Performance

Summary of all time highs, changes and price drops for National Australia Bank
Historical stock prices
Current Share Price	AU$28.81
52 Week High	AU$33.75
52 Week Low	AU$25.43
Beta	0.94
1 Month Change	-5.67%
3 Month Change	3.86%
1 Year Change	5.65%
3 Year Change	3.45%
5 Year Change	-8.07%
Change since IPO	261.94%

Shareholder Returns

	NAB	AU Banks	AU Market
7D	-1.8%	-2.8%	-1.7%
1Y	5.6%	-10.1%	-10.8%

Return vs Industry: NAB exceeded the Australian Banks industry which returned -10.1% over the past year.

Return vs Market: NAB exceeded the Australian Market which returned -10.8% over the past year.

Price Volatility

Is NAB's price volatile compared to industry and market?
NAB volatility
NAB Average Weekly Movement	2.8%
Banks Industry Average Movement	3.4%
Market Average Movement	9.4%
10% most volatile stocks in AU Market	16.5%
10% least volatile stocks in AU Market	4.2%

Stable Share Price: NAB is less volatile than 75% of Australian stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: NAB's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1834	32,932	Ross McEwan	https://www.nab.com.au

National Australia Bank Limited provides financial services to individuals and businesses in Australia, New Zealand, and internationally. It operates through Business and Private Banking, Personal Banking, Corporate and Institutional Banking, and New Zealand Banking segments. It operates through Business and Private Banking; Personal Banking; Corporate and Institutional Banking; New Zealand Banking; and Corporate Functions and Other segments.

National Australia Bank Fundamentals Summary

How do National Australia Bank's earnings and revenue compare to its market cap?
NAB fundamental statistics
Market Cap	AU$90.65b
Earnings (TTM)	AU$6.81b
Revenue (TTM)	AU$17.62b

13.3x

P/E Ratio

1.5x

P/B Ratio

Is NAB overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
NAB income statement (TTM)
Revenue	AU$17.62b
Cost of Revenue	AU$0
Gross Profit	AU$17.62b
Other Expenses	AU$10.81b
Earnings	AU$6.81b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Nov 09, 2022

Earnings per share (EPS)	2.16
Gross Margin	100.00%
Net Profit Margin	38.65%
Debt/Equity Ratio	394.1%

How did NAB perform over the long term?

See historical performance and comparison

Dividends

5.1%

Current Dividend Yield

67%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is NAB undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for NAB?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for NAB. This is calculated by dividing NAB's market cap by their current preferred multiple.
What is NAB's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	AU$90.65b

NAB key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	n/a
Enterprise Value/EBITDA	n/a
PEG Ratio	3.5x

Price to Earnings Ratio vs Peers

How does NAB's PE Ratio compare to its peers?

NAB PE Ratio vs Peers

The above table shows the PE ratio for NAB vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	11.2x
WBC Westpac Banking	13.6x	12.1%	AU$72.2b
ANZ Australia and New Zealand Banking Group	10.1x	4.0%	AU$68.1b
CBA Commonwealth Bank of Australia	15.9x	3.1%	AU$153.8b
BFL BSP Financial Group	5.2x	n/a	AU$2.3b
NAB National Australia Bank	13.3x	3.8%	AU$90.6b

Price-To-Earnings vs Peers: NAB is expensive based on its Price-To-Earnings Ratio (13.3x) compared to the peer average (11.2x).

Price to Earnings Ratio vs Industry

How does NAB's PE Ratio compare vs other companies in the Global Banks Industry?

Price-To-Earnings vs Industry: NAB is expensive based on its Price-To-Earnings Ratio (13.3x) compared to the Global Banks industry average (8.8x)

Price to Earnings Ratio vs Fair Ratio

What is NAB's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

NAB PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	13.3x
Fair PE Ratio	13.1x

Price-To-Earnings vs Fair Ratio: NAB is expensive based on its Price-To-Earnings Ratio (13.3x) compared to the estimated Fair Price-To-Earnings Ratio (13.1x).

Share Price vs Fair Value

What is the Fair Price of NAB when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: NAB (A$28.81) is trading below our estimate of fair value (A$46.02)

Significantly Below Fair Value: NAB is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Future Growth

How is National Australia Bank forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

3.8%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: NAB's forecast earnings growth (3.8% per year) is above the savings rate (1.8%).

Earnings vs Market: NAB's earnings (3.8% per year) are forecast to grow slower than the Australian market (6.5% per year).

High Growth Earnings: NAB's earnings are forecast to grow, but not significantly.

Revenue vs Market: NAB's revenue (5% per year) is forecast to grow faster than the Australian market (3.7% per year).

High Growth Revenue: NAB's revenue (5% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: NAB's Return on Equity is forecast to be low in 3 years time (12.1%).

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Past Performance

How has National Australia Bank performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-1.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: NAB has a high level of non-cash earnings.

Growing Profit Margin: NAB's current net profit margins (38.7%) are higher than last year (33.6%).

Past Earnings Growth Analysis

Earnings Trend: NAB's earnings have declined by 1.6% per year over the past 5 years.

Accelerating Growth: NAB's earnings growth over the past year (32.2%) exceeds its 5-year average (-1.6% per year).

Earnings vs Industry: NAB earnings growth over the past year (32.2%) exceeded the Banks industry -6.9%.

Return on Equity

High ROE: NAB's Return on Equity (11.2%) is considered low.

Discover strong past performing companies

Financial Health

How is National Australia Bank's financial position? (This company is analysed differently as a bank or financial institution)

Financial Health Score

6/6

Financial Health Score 6/6

Asset Level
Allowance for Bad Loans
Low Risk Liabilities
Loan Level
Low Risk Deposits
Level of Bad Loans

Financial Position Analysis

Debt to Equity History and Analysis

Balance Sheet

Financial Institutions Analysis

Asset Level: NAB's Assets to Equity ratio (16x) is moderate.

Allowance for Bad Loans: NAB has a sufficient allowance for bad loans (443%).

Low Risk Liabilities: 72% of NAB's liabilities are made up of primarily low risk sources of funding.

Loan Level: NAB has an appropriate level of Loans to Assets ratio (67%).

Low Risk Deposits: NAB's Loans to Deposits ratio (100%) is appropriate.

Level of Bad Loans: NAB has an appropriate level of bad loans (0.2%).

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Dividend

What is National Australia Bank current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

5.07%

Current Dividend Yield

Dividend Yield vs Market

National Australia Bank Dividend Yield vs Market

How does National Australia Bank dividend yield compare to the market?
Segment	Dividend Yield
Company (National Australia Bank)	5.1%
Market Bottom 25% (AU)	2.8%
Market Top 25% (AU)	7.1%
Industry Average (Banks)	5.2%
Analyst forecast in 3 Years (National Australia Bank)	5.9%

Notable Dividend: NAB's dividend (5.07%) is higher than the bottom 25% of dividend payers in the Australian market (2.8%).

High Dividend: NAB's dividend (5.07%) is low compared to the top 25% of dividend payers in the Australian market (7.16%).

Stability and Growth of Payments

Stable Dividend: NAB's dividend payments have been volatile in the past 10 years.

Growing Dividend: NAB's dividend payments have fallen over the past 10 years.

Current Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (67.3%), NAB's dividend payments are covered by earnings.

Future Payout to Shareholders

Future Dividend Coverage: NAB's dividends in 3 years are forecast to be covered by earnings (71.6% payout ratio).

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

2.9yrs

Average management tenure

CEO

Ross McEwan (65 yo)

2.83yrs

Tenure

AU$5,293,235

Compensation

Mr. Ross Maxwell McEwan, B.B.S., CBE., has been Group Chief Executive Officer, Managing Director & Director at National Australia Bank Ltd. since December 02, 2019. Mr. McEwan served as Group Chief Executi...

CEO Compensation Analysis

Ross McEwan's Compensation vs National Australia Bank Earnings

How has Ross McEwan's remuneration changed compared to National Australia Bank's earnings?
Date	Total Comp.	Salary	Company Earnings
Mar 31 2022	n/a	n/a	AU$7b
Dec 31 2021	n/a	n/a	AU$7b
Sep 30 2021	AU$5m	AU$2m	AU$6b
Jun 30 2021	n/a	n/a	AU$6b
Mar 31 2021	n/a	n/a	AU$5b
Dec 31 2020	n/a	n/a	AU$4b
Sep 30 2020	AU$3m	AU$2m	AU$3b

Compensation vs Market: Ross's total compensation ($USD3.41M) is about average for companies of similar size in the Australian market ($USD3.85M).

Compensation vs Earnings: Ross's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: NAB's management team is considered experienced (2.9 years average tenure).

Board Members

Experienced Board: NAB's board of directors are considered experienced (6.4 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

ASX:NAB Recent Insider Transactions by Companies or Individuals
Date	Value	Name	Entity	Shares	Max Price
19 Jul 22	BuyAU$66,917,156	State Street Global Advisors, Inc.	Company	2,108,929	AU$32.41
03 May 22	BuyAU$577,210	State Street Global Advisors, Inc.	Company	17,975	AU$32.12
03 May 22	SellAU$202,602	State Street Global Advisors, Inc.	Company	6,308	AU$32.12
02 May 22	BuyAU$135,121	State Street Global Advisors, Inc.	Company	167,727	AU$32.63
28 Apr 22	BuyAU$0	State Street Global Advisors, Inc.	Company	898,708	AU$33.60
28 Apr 22	SellAU$1,964,986	State Street Global Advisors, Inc.	Company	1,337,521	AU$34.75
30 Mar 22	BuyAU$252,384	State Street Global Advisors, Inc.	Company	6,126,860	AU$32.38
01 Feb 22	BuyAU$243,775,352	The Vanguard Group, Inc.	Company	8,082,737	AU$30.16
28 Jan 22	SellAU$102,497,364	The Vanguard Group, Inc.	Company	3,379,438	AU$30.33
27 Jan 22	BuyAU$16,466,365	The Vanguard Group, Inc.	Company	559,890	AU$29.41
27 Jan 22	SellAU$26,255,010	The Vanguard Group, Inc.	Company	913,221	AU$29.14
17 Jan 22	BuyAU$233,606,863	The Vanguard Group, Inc.	Company	7,746,547	AU$30.16
07 Jan 22	SellAU$66,074,476	The Vanguard Group, Inc.	Company	2,207,576	AU$29.98
29 Nov 21	BuyAU$0	The Vanguard Group, Inc.	Company	252,789	AU$28.58
22 Nov 21	BuyAU$31,850,423	The Vanguard Group, Inc.	Company	1,056,194	AU$30.16
18 Nov 21	SellAU$391,846	The Vanguard Group, Inc.	Company	13,236	AU$29.73

Ownership Breakdown

What is the ownership structure of NAB?
Owner Type	Number of Shares	Ownership Percentage
Individual Insiders	913,857	0.03%
Private Companies	8,430,020	0.3%
Institutions	829,508,555	26.4%
General Public	2,307,618,218	73.3%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Top Shareholders

Top 25 shareholders own 23.6% of the company

Ownership	Name	Shares	Current Value	Change %	Portfolio %
5.65%	BlackRock, Inc.	177,651,034	A$5.1b	0%	0.08%
5.16%	State Street Global Advisors, Inc.	162,401,728	A$4.7b	1.34%	0.17%
5.16%	The Vanguard Group, Inc.	162,322,845	A$4.7b	0%	0.07%
1.16%	Colonial First State Investments Limited	36,639,050	A$1.1b	0%	8.7%
1.1%	Norges Bank Investment Management	34,612,793	A$997.2m	0%	0.09%
0.7%	Commonwealth Superannuation Corporation	21,900,294	A$630.9m	0%	7.86%
0.61%	Geode Capital Management, LLC	19,194,847	A$553.0m	0.1%	0.05%
0.45%	Dimensional Fund Advisors LP	14,029,485	A$404.2m	0.14%	0.07%
0.35%	Australian Foundation Investment Company Limited	11,154,646	A$321.4m	0%	4.52%
0.29%	Netwealth Investments Ltd.	9,175,654	A$264.4m	0%	3.61%
0.29%	J.P. Morgan Asset Management, Inc.	8,984,798	A$258.9m	-1.87%	0.03%
0.27%	FMR LLC	8,381,901	A$241.5m	7.44%	0.01%
0.26%	Charles Schwab Investment Management, Inc.	8,188,837	A$235.9m	0.92%	0.04%
0.26%	Franklin Resources, Inc.	8,133,120	A$234.3m	0.07%	0.07%
0.25%	Teachers Insurance and Annuity Association-College Retirement Equities Fund	7,998,540	A$230.4m	0.54%	0.05%
0.2%	BetaShares Capital Limited	6,236,899	A$179.7m	3.86%	1.51%
0.2%	UBS Asset Management	6,138,930	A$176.9m	-13.02%	0.02%
0.19%	Argo Investments Limited	5,934,685	A$171.0m	0%	3.13%
0.16%	abrdn plc	5,057,148	A$145.7m	0%	0.1%
0.16%	Eastspring Investments (Singapore) Limited	4,943,444	A$142.4m	-0.1%	0.46%
0.16%	Milton Corporation Limited	4,880,441	A$140.6m	0%	9.04%
0.15%	New York Life Investment Management LLC	4,814,912	A$138.7m	0.05%	0.62%
0.15%	AMP Capital Investors Limited	4,744,764	A$136.7m	0%	6.67%
0.14%	MAM Pty Limited	4,539,031	A$130.8m	0%	8.56%
0.14%	Schroder Investment Management Limited	4,502,205	A$129.7m	0.22%	0.07%

Ticker	Exchange	Primary Security	Security Type	Country	Currency	Listed on
NABZ.Y	OTCPK (Pink Sheets LLC)		SPONS ADR EACH CNV INTO 5 NPV	US	USD	Feb 1985
NAL0	MUN (Boerse Muenchen)		SPONS ADR EACH CNV INTO 5 NPV	DE	EUR	Feb 1985
NAUB.F	OTCPK (Pink Sheets LLC)	Yes	Ordinary Shares	US	USD	Jan 1992
NAL	DB (Deutsche Boerse AG)	Yes	Ordinary Shares	DE	EUR	Jan 1992
NAB	ASX (Australian Securities Exchange)	Yes	Ordinary Shares	AU	AUD	Jan 1992
NAB	CHIA (Chi-X Australia)	Yes	Ordinary Shares	AU	AUD	Jan 1992
NABPF	ASX (Australian Securities Exchange)		FRN CNV PERP AUD1000	AU	AUD	Mar 2019
NABPH	ASX (Australian Securities Exchange)		FRN CNV PERP AUD1000	AU	AUD	Dec 2020
NABPI	CHIA (Chi-X Australia)		3.15% PERP NON CUM RED CNV PREF T-12-28	AU	AUD	Jul 2022
NABPI	ASX (Australian Securities Exchange)		3.15% PERP NON CUM RED CNV PREF T-12-28	AU	AUD	Jul 2022

Data	Last Updated (UTC time)
Company Analysis	2022/10/02 00:00
End of Day Share Price	2022/09/30 00:00
Earnings	2022/03/31
Annual Earnings	2021/09/30