National Australia Bank vs Coles Group shares: Which blue chip should I buy next for my SMSF?

If you’re looking at National Australia Bank Ltd (ASX: NAB) shares versus Coles Group Ltd (ASX: COL) shares for your SMSF, you’re not alone. Both are household-name blue chips on the ASX, known for reliable dividends, defensive business models, and roles as core holdings in many Australian portfolios. But which deserves a spot in your next SMSF purchase? Let’s break down the fundamentals, dividend outlook, recent momentum, and relative value to help you decide.

The case for National Australia Bank

National Australia Bank, or NAB, is one of the ‘big four’ banks dominating Australian and New Zealand banking. Its mainstays are retail and business banking, plus some operations overseas. NAB’s size and scale, with a strong local focus, give it a distinct position as a pillar of the Australian financial system.

Notable fundamentals jumping out include:

• Market cap: $120.18 billion, one of the biggest companies on the ASX
• P/E ratio: 19.63, on the lower side for a blue-chip, partly reflecting the lower-growth, higher-stability banking sector
• Dividend yield: 4.33%, fully franked at 100%, meaning those dividends can be particularly attractive for SMSFs seeking income with franking credits

NAB’s earnings per share comes in at $2.00, with a dividend per share of $1.70, showing it’s distributing a healthy portion of its profits. Year-to-date return is -5.22%, meaning the share price has drifted lower this year, but the dividend cushion gives some comfort. According to its most recent public description, NAB has built a dominant presence in local banking, serving millions of Australians and New Zealanders.

The case for Coles

Coles is Australia’s second-largest supermarket operator, with a nationwide footprint spanning Coles Supermarkets, Coles Liquor, and an online offering. Famous for its weekly specials and focus on essential products, Coles is a true consumer staple — the sort of retailer that hums along no matter what the economy is doing.

A few highlights from the numbers:

• Market cap: $31.76 billion (significantly smaller than NAB, but still a titan in listed retail)
• P/E ratio: 29.19, higher than NAB’s, reflecting different growth expectations for supermarket retail versus banking
• Dividend yield: 3.29%, also fully franked, making Coles appealing to income-seeking SMSFs

Coles delivers earnings per share of $0.812 and a dividend per share of $0.74 — again, a decent portion of profits returned to shareholders. Year-to-date, Coles shares are up 14.18%, outpacing much of the market. According to its latest company profile, Coles operates across groceries, liquor, and household goods, maintaining a huge retail presence and brand recognition.

Valuation comparison

Here’s how NAB and Coles stack up on the key valuation and income stats:

	National Australia Bank	Coles
Market Cap	$120.18b	$31.76b
P/E Ratio	19.63	29.19
Dividend Yield	4.33% (100% franked)	3.29% (100% franked)
Dividend per Share	$1.70	$0.74
Earnings per Share	$2.000	$0.812
Year to Date Return	-5.2%	14.2%

NAB currently offers a materially higher dividend yield than Coles and does so with full franking. The P/E ratio for NAB is noticeably lower — but keep in mind: banks and retailers tend to trade at different benchmarks, so comparing their P/E ratios should be done in context. Coles’ higher P/E may price in its perceived stability and growth outlook in groceries, while NAB’s lower multiple can reflect sector trends or short-term headwinds.

Recent share price momentum

Comparing recent share price performance up to 14 October 2026:

• National Australia Bank: Closed at $38.55, down 1.78% for the day, and -5.2% year-to-date. NAB’s shares have seen some bouts of volatility lately, with a short-term downward drift this year.
• Coles Group: Closed at $23.63, down 0.30% for the day, but is up 14.2% year-to-date. Coles shares have been far more resilient in 2026, delivering strong positive momentum versus the banking giant.

Which is the better buy?

If I could only add one of these blue chips to my SMSF right now, my pick would be Coles. Here’s why: Coles may be on a higher P/E multiple, but its share price has delivered stronger momentum all year. The retail staple is churning out reliable profits and still providing a solid, fully franked dividend — albeit at a slightly lower yield than NAB. The steady consumer staples business has shown real resilience, especially through periods of economic uncertainty.

Meanwhile, NAB’s dividend yield edges out Coles and may appeal to income-focused SMSFs, particularly with those juicy franking credits. But the negative share price performance year-to-date — and sensitivity to interest rate cycles and regulatory shifts — gives me pause. Until NAB can demonstrate steadier share growth or less sector risk, I’d lean toward the proven strength and momentum of Coles as a solid core holding for a long-term SMSF strategy.

The post NAB vs Coles: Which is the better ASX blue-chip buy for SMSF investors? appeared first on The Motley Fool Australia.

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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.

Commonwealth Bank of Australia (ASX: CBA) shares usually provide shareholders with a solid dividend yield. This decade, it has regularly hiked the passive income payout following the COVID-19 pandemic.

Investors may be looking at the CBA share price as a potential opportunity. At the time of writing, it’s down around 16% in the past six months. Lower prices typically mean a better valuation.

Part of the consideration when thinking about an investment for dividends should be the profitability and operational performance.

The ASX bank share‘s latest report contained solid numbers. Cash net profit grew 7% to $11 billion.

Looking at some of the core drivers of its profit over 12 months, retail transaction accounts grew by 6% to 12.3 million, the home lending balance rose by 7% to $636 billion, business transaction accounts grew 7% to 1.4 million and business lending rose 13% to $180 billion.

However, credit demand has diminished in the last few months following interest rate rises and taxation changes to capital gains and negative gearing.

With all of the above in mind, let’s take a look at what dividends owning CBA shares could generate in 2027.

Commonwealth Bank passive dividend income projection for 2027

We’re already a few months into CBA’s 2027 financial year, so it won’t be too long until we hear about the half-year numbers.

In terms of the potential passive income, analysts are expecting an improvement of the ASX bank share’s bottom line in FY27. This could help the business deliver a bigger dividend.

Based on the estimate on CMC Invest, Commonwealth Bank is projected to pay an annual dividend per share of $5.20 in FY27. That would represent a year-over-year increase of 3%.

At the time of writing, that forecast payout translates into a dividend yield of 3.4% excluding franking credits and 4.8% including franking credits.

Is this a good time to invest in CBA shares?

According to CMC Invest, there have been eight analyst ratings in the last three months. All of those ratings from experts were a sell. So, there’s a universal view from investment professionals that the Commonwealth Bank share price is overvalued.

How overvalued do those analysts think the ASX bank share is?

A price target tells us where analysts think the share price will go over the next 12 months.

The average price target of those eight analysts is currently $123.08. Therefore, that group of analysts are collectively suggesting the CBA share price could fall by close to 20% over the next year (at the time of writing).

Therefore, it could be wise to look at other ASX share opportunities for returns.

The post If I invest $20,000 in CBA shares, how much passive income will I receive in 2027? 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 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.

I believe buy and hold investing is one of the best ways to build wealth over the long term.

By investing in quality businesses and giving them time to grow, investors can benefit from compounding returns without needing to constantly buy and sell shares.

And I think ASX exchange traded funds (ETFs) can be particularly useful for this approach, providing exposure to a collection of companies through a single investment.

With that in mind, here are three ASX ETFs to consider buying and holding until 2036.

Betashares Global Cash Flow Kings ETF (ASX: CFLO)

The first ETF to look at is the Betashares Global Cash Flow Kings ETF.

When investing for the long term, it makes sense to favour businesses that consistently generate strong cash flows.

After all, profits are important, but having cash available allows companies to invest in growth, reduce debt, make acquisitions, and reward shareholders.

And companies that generate plenty of cash can be better placed to navigate difficult economic conditions.

This is essentially what the Betashares Global Cash Flow Kings ETF is looking for. It invests in 200 global companies with strong free cash flow generation, while also considering factors such as debt levels and cash flow growth.

I think this approach could be well suited to investors wanting to own financially strong businesses over the next decade.

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

Another ASX ETF that could be worth buying and holding until 2036 is the Vanguard FTSE Asia ex Japan Shares Index ETF.

I think Asia could offer some excellent long-term opportunities as its economies develop and businesses become increasingly important on the global stage.

The region is already home to major technology companies, manufacturers, financial institutions, and consumer businesses. And over the next decade, I expect rising wealth, technological development, and growing demand for products and services to create further opportunities.

This fund gives investors exposure to companies across markets including China, Taiwan, South Korea, and India. This means that rather than trying to predict which country or company will perform best, investors can gain exposure to a wide selection of Asian businesses.

For investors wanting to look beyond Australia and the United States, this could be an attractive option.

Global X Artificial Intelligence ETF (ASX: GXAI)

A final ASX ETF to consider is the Global X Artificial Intelligence ETF.

Artificial intelligence has already made enormous progress, but I think we are still relatively early in seeing how widely the technology will be adopted.

Businesses are increasingly looking at ways to use AI to improve productivity, reduce costs, and develop new products. And as the technology becomes more capable, there could be opportunities for companies across many industries to benefit.

The Global X Artificial Intelligence ETF provides exposure to businesses involved in developing AI technology, supplying the hardware needed to run it, and incorporating it into products and services.

Of course, there will be plenty of competition, and not every AI investment will deliver the returns investors expect.

But with a decade-long runway, this ETF could offer exciting long-term growth potential.

The post Buy and hold these top ASX ETFs until 2036 appeared first on The Motley Fool Australia.

More reading

• Vanguard ETFs will pay dividends today. Here’s how much
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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 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.