Investing in ASX 200 dividend shares can be a good way of earning passive income for extra cash.
National Australia Bank Ltd (ASX: NAB) has a long history of paying dividends to investors.
And the big four bank’s dividend increased in 2022 compared to 2020 and 2021.
So how much would I need to invest in NAB shares to generate a $150 monthly income?
Let’s crunch the numbers.
Firstly, a monthly income of $150 would generate an annual passive income of $1800.
National Australia Bank paid a final dividend of 78 cents a share in 2022 and an interim dividend of 73 cents a share.
In total, this means NAB paid $1.51 in total dividends in the 2022 financial year.
To have received $1800, or $150 a month, in passive income, you would need to have owned 1,192 NAB shares.
At Thursday’s closing price of $28.13, buying 1,192 NAB shares would cost you $33,530.96.
What next?
Goldman is tipping NAB to increase its dividend in FY23 and pay fully franked dividends of $1.73 in FY 2023.
If this is delivered, you would only need to own 1,040 of NAB shares to receive $1800 in passive income for the year.
This would set you back $29,255.20 — so less than what was required to generate this income in 2022.
NAB delivered an unaudited statutory net profit of $2.05 billion in the first quarter of FY23. Revenue lifted 15%, while the bank’s net interest margin jumped 12 basis points to 1.79%.
Share price snapshot
The National Australia Bank share price has risen nearly 15% in the last year.
The bank has a market capitalisation of about $88.3 billion based on the last closing price.
The post How much I would need to invest in NAB shares to earn $150 a month in passive income? appeared first on The Motley Fool Australia.
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More reading
- Investor or depositor? Warren Buffett sounds off on banking crisis
- Buy NAB and this ASX dividend share now: analysts
- It’s official, the ASX 200 big four banks are the world’s most capitalised. Should you buy?
- Mortgage competition has never been hotter, so are NAB shares worth buying right now?
- Could right now be a great time to buy ASX 200 bank stocks for passive income?
Motley Fool contributor Monica O’Shea 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.
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