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Last edited 5 years ago
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#Financials
stale
Added 5 years ago

Short term trade idea based on high dividend yield. In essence - Aussie banks don't typically offer this type of yield so either the stock price goes up, the dividend goes down or the market changes its pattern.

NAB has telegraphed that 314m in customer remediation costs will be incurred in Q4. They should be able to maintain a dividend of 99c if they payout ~90% of estimated earnings (a few cents lower would not compromise the basis of the trade). At current share price (24.84) this is a dividend yield of 7.97% or 11.38% grossed up. I see it as unlikely that the stock will drop the entire of the value of the dividend once trading ex-dividend.

There is an unspecified amount of Royal Commission costs lurking, the low share price may reflect analysts' estimates of these costs.