Fortescue vs National Australia Bank shares: Which blue chip is the better buy?

When it comes to ASX blue chips, Fortescue Ltd (ASX: FMG) and National Australia Bank Ltd (ASX: NAB) are two household names that regularly appear on investor watchlists. Both deliver fully-franked dividends, boast huge market caps, and are pillars of the local stock market—yet they couldn’t be more different in what they do or how they’ve performed recently. With volatility hitting miners and banks alike, here’s my take on Fortescue vs National Australia Bank shares today.

The case for Fortescue

Fortescue is a mining powerhouse, best known for its iron ore operations in the Pilbara region of Western Australia. The company operates major mining hubs and some of the most efficient rail and port infrastructure in the game. According to its most recent public description, Fortescue is now ranked as the world’s fourth largest iron ore producer, which gives it serious scale and bargaining power.

Three fundamentals really stand out to me for Fortescue shares right now:

• Dividend yield: It boasts a fat 6.64% yield (fully franked), one of the highest among ASX blue chips.
• P/E ratio: At 12.25, Fortescue trades on a much lower price-to-earnings multiple than most large ASX companies.
• YTD performance: Its year-to-date return is a disappointing -21.2%, showing it’s faced real headwinds in 2026 so far.

Fortescue’s dividends have been consistently fully franked, and the company has a history of paying out special dividends when iron ore prices have been strong. However, as a miner, its fortunes are closely tied to iron ore prices and China’s demand for steel.

The case for National Australia Bank

National Australia Bank is one of the “Big Four” banks, with a huge network across Australia and New Zealand. NAB delivers a broad suite of banking services, from retail and business banking to wealth management and institutional finance. Thanks to its established brand and extensive branch network, NAB is a pillar of the local financial system and a favourite with steady-income investors.

Here are the top points for NAB:

• Dividend reliability: Its current yield is 4.35% (fully franked), not as high as Fortescue but underpinned by a long track record of steady and uninterrupted payouts.
• P/E ratio: NAB trades on a P/E of 19.56, which is meaningfully higher than Fortescue’s but still reasonable for a major bank.
• Market cap: It dwarfs Fortescue with a $122.05 billion market cap, reflecting NAB’s position as one of the largest companies on the ASX.
• YTD performance: NAB shares are only down 5.6% so far in 2026, which is much steadier than what we’ve seen from Fortescue.

NAB’s dividends are fully franked, and the payout has been remarkably consistent over the past decade-plus, weathering economic turbulence and regulatory changes much better than most cyclical stocks.

Valuation comparison

Here’s how these giants stack up on the key numbers:

	Fortescue	National Australia Bank
Market Cap	$50.62 billion	$122.05 billion
P/E Ratio	12.25	19.56
Dividend Yield	6.64% (100% franked)	4.35% (100% franked)
Earnings Per Share (EPS)	0.931	2.000
Dividend Per Share	1.08	1.70
YTD Return	-21.2%	-5.6%

Note: National Australia Bank’s P/E ratio is quite a bit higher than Fortescue’s, but keep in mind that mining and banking are completely different sectors with different typical valuations. Also, Fortescue’s reported P/E and EPS figures suggest a lower implied share price than spot prices, possibly reflecting the difference between underlying or forward earnings and reported EPS.

Recent share price momentum

Comparing recent share price performance up to 30 September 2026:

• Fortescue: Closed at $16.44, up 1.04% on the day but still down 21.2% for the year to date.
• National Australia Bank: Closed at $39.15, up 0.10% on the day and down just 5.6% year to date.

Over the past few weeks, both stocks have seen short bursts of volatility, with Fortescue buffeted by commodity swings and NAB supported by steady, if unspectacular, trading.

Which is the better buy?

If I had to pick one blue chip from these two today, I’d lean toward National Australia Bank. Yes, Fortescue’s dividend yield is higher and its valuation appears cheaper on a P/E basis, but that hefty yield comes at the price of much greater volatility—and its share price shows it, down over 21% for the year so far. NAB, in contrast, offers a steadier ride with fully franked dividends, strong brand strength, and much less price downside over 2026.

Fortescue is attractive if you believe iron ore has further to run or want maximum yield while accepting serious swings along the way. But for my money—and especially for investors focused on stability, income reliability, and blue chip defensiveness—NAB looks the safer bet for the current market environment.

The post Fortescue vs National Australia Bank: Which ASX blue chip is the better buy this month? appeared first on The Motley Fool Australia.

More reading

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• If I invest $10,000 in ANZ shares, what passive income could I receive in FY27?
• Regis Resources vs Fortescue: Which ASX miner is the better buy?
• Are ASX 200 bank stocks a buy in October?
• If I invest $10,000 in Fortescue shares, how much passive income could I earn in FY27?

Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial draft. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

Looking to put $10,000 to work on the ASX this October but not sure where to invest?

Exchange traded funds (ETFs) could be worth considering. They offer an easy way to invest in a collection of stocks without having to pick individual shares.

Here are four ASX ETFs that could be worth a closer look this month.

iShares S&P 500 ETF (ASX: IVV)

The iShares S&P 500 ETF could be an excellent option for investors wanting exposure to the US share market.

This fund tracks the famous S&P 500 Index, giving investors access to 500 of America’s largest listed companies.

Its holdings include Microsoft (NASDAQ: MSFT), Apple (NASDAQ: AAPL), Nvidia (NASDAQ: NVDA), and Amazon (NASDAQ: AMZN), alongside major businesses operating in healthcare, financial services, consumer goods, and other industries.

Many of these companies generate significant revenue internationally, which means investors are gaining exposure to businesses that operate across the global economy.

With a long investment horizon, this ASX ETF could be well worth considering.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

Another ASX ETF to consider buying in October is the Vanguard Australian Shares High Yield ETF.

This fund focuses on Australian stocks that are forecast to provide higher dividend yields than the broader share market.

Its portfolio includes businesses from sectors such as banking, resources, telecommunications, and consumer goods.

This could be particularly attractive for investors looking to generate passive income while retaining exposure to potential capital growth.

Another positive is the fund’s distributions also include some franking credits, which can provide additional benefits to eligible Australian investors.

Vanguard FTSE Asia ex Japan Shares Index ETF (ASX: VAE)

The Vanguard FTSE Asia ex Japan Shares Index ETF invests in companies across major Asian markets, including China, Taiwan, South Korea, India, and Singapore.

This gives investors access to businesses operating in technology, manufacturing, financial services, healthcare, and consumer markets.

Asia is home to some of the world’s largest economies and most important technology companies. It also has growing consumer markets and a rising middle class that could support economic growth over the long term.

This makes the Vanguard FTSE Asia ex Japan Shares Index ETF an option to consider for investors seeking opportunities outside Australia and the United States.

Betashares Global Robotics and Artificial Intelligence ETF (ASX: RBTZ)

A final ASX ETF worth considering in October is the Betashares Global Robotics and Artificial Intelligence ETF.

This fund invests in stocks involved in robotics, automation, artificial intelligence, and related technologies.

From manufacturing and logistics to healthcare and agriculture, robotics and intelligent machines have the potential to change how numerous industries operate.

As technology improves and adoption increases, the companies developing these solutions could enjoy significant growth.

This could make the Betashares Global Robotics and Artificial Intelligence ETF an attractive option for investors seeking exposure to a long-term technology theme.

The post Where to invest $10,000 in ASX ETFs in October appeared first on The Motley Fool Australia.

More reading

• My top 3 Vanguard ETFs for October
• 5 excellent ASX ETFs to buy in October
• VGS vs IVV: Which ETF would I buy with $10,000?
• How much must I invest in IVV ETF shares to earn a $1,000 passive income in 2027?
• Own US ETFs like IVV or NDQ? Here’s why your dividends are so low

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 Amazon, Apple, Microsoft, Nvidia, and iShares S&P 500 ETF. The Motley Fool Australia has recommended Amazon, Apple, Microsoft, Nvidia, Vanguard Australian Shares High Yield ETF, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

I’m backing ASX dividend stock WCM Global Growth Ltd (ASX: WQG) as one of the best picks for passive income on the ASX.

In my own portfolio, I’m building positions in businesses that pay strong dividends and have a track record of returns. I’m utilising dividend income to pay for certain discretionary expenses in life, and that’s helping boost my household’s finances.

Thankfully, WCM Global Growth is also delivering dividend growth and long-term capital growth, which means it’s giving me a trifecta of what I’m looking for financially – dividend yield, payout growth, and capital growth.

Let’s run through why the listed investment company (LIC) is a strong pick with a $3,000 investment for passive income.

Compelling investment strategy

WCM Global Growth is a California-based investment manager that specialises in global and emerging market shares. WCM specialises in global shares and emerging market shares.

The fund manager looks for two key criteria to be considered for inclusion in the WCM Global Growth portfolio.

First, it wants to see a rising competitive advantage (or expanding economic moat).

Second, WCM wants to see that the company has a corporate culture that supports the expansion of this moat.

The WCM investment team believe that the ‘direction’ of a company’s economic moat is of more importance than its absolute size. The research focuses on identifying companies with a positive moat trajectory, as measured by rising return on invested capital, rather than those with a large but static or declining economic moat.

Since its inception in June 2017, the LIC has delivered net returns of 15.6% per year, after fees, and is more than 2% per year stronger than the global share market benchmark return.

Those good returns allow the business to pay a rewarding dividend.

Large dividend yield

The ASX dividend stock has provided guidance that it will pay an annual dividend per share of 10.1 cents over the next 12 months.

At the time of writing, that means it’s going to deliver a dividend yield of 4.9% excluding franking credits and 7% including franking credits.

In my view, there are few businesses that are going to pay a dividend yield as good as that over the next 12 months and deliver growth.

Passive income growth

The LIC has a “progressive quarterly dividend policy”. In other words, it delivers a payout every quarter, and that dividend is growing every three months.  

Its latest quarterly dividend payment was 2.35 cents per share, paid on 30 September 2026. The LIC has shown how the dividend will progress over the next 12 months.

It plans to pay a quarterly dividend of 2.45 cents per share in December 2026 – that’s 4.25% higher than the September payment.

WCM Global Growth expects to pay a quarterly dividend of 2.5 cents per share in March 2027 – that’s 6.4% more than the September payment.

The LIC has guided that it will pay 2.55 cents per share in June 2027 – that’s an 8.5% increase compared to the September payout.

The ASX dividend stock plans to pay a quarterly dividend of 2.6 cents per share in September 2027 – that’s a year-over-year increase of 10.6%.

Its dividend has regularly grown over the last several years. I expect the business will be able to continue hiking its dividend at an inflation-beating rate in the coming years.

Capital growth

When LICs generate investment profits, they can decide to pay some of it as a dividend and smooth out the passive income returns for shareholders.

How much of the profit they pay will decide how much is retained to generate more returns. Retained profits help deliver capital growth as the LIC’s net tangible assets (NTA) grow.

The bigger the dividend yield LICs deliver, the less that’s retained for future growth. So, LICs need to strike the right balance between short-term dividends and retaining some profits for long-term performance.

Thankfully, WCM Global Growth’s investment returns have been sufficient to deliver a good dividend and add to its NTA over time. Over the past three years, the WCM Global Growth share price has risen by around 70%. Past performance is not a reliable indicator of future performance, of course.

$3,000 investment

By investing $3,000 at the time of writing, an investor can buy 1,463 shares of this ASX dividend stock, which I think would be a smart choice for passive income investors.

But, it’s not the only business I’d be willing to put $3,000 (or more) into to generate returns.

The post $3,000 buys 1,463 shares in an impressively reliable ASX dividend stock appeared first on The Motley Fool Australia.

More reading

• How much do I need to retire on $110,000 a year at 65?
• How much is needed in superannuation to target a $10,000 monthly passive income?
• I’d buy 99,010 shares of this ASX stock to aim for $10,000 of annual passive income
• How much do I need to retire on $75,000 a year at 45?
• 33 ASX shares going ex-dividend next week

Motley Fool contributor Tristan Harrison has positions in Wcm Global Growth. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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.