An ASX dividend giant I’d buy over NAB stock right now

At present, National Australia Bank Ltd (ASX: NAB) stock is looking attractive from a dividend standpoint.

This ASX 200 bank stock has long been famous for paying out fat, fully franked dividends. And given NAB is the big four bank offering the largest fully franked dividend yield at 4.2% today, it’s understandable that this stock might be drawing the eyeballs of many income investors right now.

However, there’s an ASX dividend giant that I would easily choose over NAB if I were seeking high-quality passive income today.

That dividend giant is MFF Capital Investments Ltd (ASX: MFF).

MFF Capital is a listed investment company (LIC), meaning that it, unlike most ASX shares, it invests in a portfolio of underlying assets itself, which it manages on behalf of its shareholders.

In MFF’s case, this portfolio is mostly made up of US stocks. MFF has always been run using the Warren Buffett template of buying high-quality companies that possess wide economic moats and holding onto them.

Its portfolio manager is Chris Mackay, who was one of the co-founders of Magellan. Mackay has long been a famous Buffett disciple, which is evident from this LIC’s investing strategy.

Unlike Buffett, though, Mackay is not afraid to invest in tech shares, with many of MFF’s largest holdings hailing from the tech sector. This is evident from the MFF portfolio’s composition. As it stands today (well, as of 31 October), this divided stock’s largest holdings were Mastercard, Alphabet, Bank of America, Visa, American Express, Amazon, and Meta Platforms.

Most of these positions have been staple MFF holdings for many years.

Better than NAB stock: What makes MFF a dividend giant?

But let’s talk dividends.

MFF’s portfolio success has allowed it to build up a formidable track record of paying dividends to its shareholders. To illustrate, it was as recently as 2017 that shareholders were getting an annual total of 2 cents per share from MFF in passive income.

But since 2017, this LIC has increased its payouts every single year. Its annual dividends hit a total of 13 cents per share in 2024, rising to 17 cents per share in 2025. The company has already guided that its first dividend of 2026 will be worth 10 cents per share, so this streak looks likely to continue.

MFF’s dividends have also always come with full franking credits attached too, making this a very lucrative income stock indeed, particularly for long-term investors.

So, although MFF capital is trading on a dividend yield of 3.62% today, well below NAB’s, its dividend track record makes it a giant in my view, and a much better buy for income than NAB stock today.

The post An ASX dividend giant I’d buy over NAB stock right now appeared first on The Motley Fool Australia.

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American Express is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Motley Fool contributor Sebastian Bowen has positions in Alphabet, Amazon, American Express, Mastercard, Meta Platforms, Mff Capital Investments, National Australia Bank, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Mastercard, Meta Platforms, and Visa. The Motley Fool Australia has recommended Alphabet, Amazon, Mastercard, Meta Platforms, Mff Capital Investments, and Visa. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.