The NAB share price outperformed the ASX 200 by 16% over 12 months

The end of the 2022 financial year for most individuals and businesses could be a good time to assess the performance of the National Australia Bank Ltd (ASX: NAB) share price.

NAB doesn’t have a financial year end date of 30 June 2022. September 2022 is the last month of NAB’s financial year.

At the time of writing, over the prior 12 months, the NAB share price has gone up 8% while the S&P/ASX 200 Index (ASX: XJO) has fallen by 8%. That’s outperformance of 16%.

NAB is one of the big four ASX bank shares along with Commonwealth Bank of Australia (ASX: CBA), Australia and New Zealand Banking Group Ltd (ASX: ANZ) and Westpac Banking Corp (ASX: WBC).

However, NAB has been executing on its strategies to try to grow profit.

Making profit and growing profit can be a key influence on the NAB share price, so let’s look at how the latest profit update went.

FY22 half-year result

A couple of months ago, NAB told investors about how it had performed for the six months to March 2022.

It said that it generated $3.48 billion of cash net profit after tax (NPAT). This was an increase of 4.1% year on year. Revenue rose by 4.6%, benefiting from “pricing discipline and strong growth in lending and deposits” which increased by 10% and 12% respectively.

The big four ASX bank said that focused investment was key for the performance in the result.

NAB said that the recent shift to a higher growth outlook provides greater scope to keep investing while continuing to deliver productivity benefits.

However, the investing and higher inflation environment means that it’s now expecting costs to rise by between 2% to 3% over the year. This is to drive growth opportunities while maintaining cost discipline.

The bank has enacted share buybacks totalling $5 billion. This had the effect of lowering the capital held to a more effective level and improving shareholder return statistics such as earnings per share (EPS).

The company also decided to increase its interim dividend per share by 21.7% to 73 cents per share.

FY22 projections

In FY22, NAB is expected to generate $2.17 of EPS according to CMC Markets. The annual dividend per share is predicted to be $1.48 per share.

At the current NAB share price, this means that it’s valued at 13x FY22’s estimated earnings with a projected grossed-up dividend yield of 7.5%.

The post The NAB share price outperformed the ASX 200 by 16% over 12 months appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison 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 recommended Westpac Banking Corporation. 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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