National Australia Bank vs ANZ shares: which delivers better income?

When it comes to income investing, the big four banks are perennial favourites among Aussie shareholders. But which comes out ahead — National Australia Bank Ltd (ASX: NAB) or ANZ Group Holdings Ltd (ASX: ANZ)? Both are banking giants with substantial dividends and a long history of rewarding shareholders. Let’s break down the data to see which looks better for those chasing income, and whether one offers a stronger investment case right now.

The case for NAB

National Australia Bank is a mainstay of Australia’s financial landscape, providing a broad spectrum of banking and wealth management services. Its primary operations are in Australia and New Zealand, with a presence in Asia, UK, and the US. As one of the nation’s ‘big four’ banks by market cap, NAB stands out for its scale and established reputation.

A few things jump out from the latest data:

• NAB boasts a market capitalisation of $120.37 billion, edging out ANZ and confirming its position as one of the country’s very largest listed firms.
• Its dividend yield sits at 4.39%, with dividends fully franked at 100%.
• NAB’s dividend history is both long and consistent, with recent annual dividends per share reaching $1.70, and all recent dividends fully franked — a feature especially appealing to Aussie investors seeking tax-effective income.

NAB bank runs a comprehensive range of services, but for me, it’s the fully franked dividend paired with its massive scale that makes NAB a classic income pick.

The case for ANZ

ANZ Group Holdings is another pillar of Australia’s banking sector, tracing its roots back to its 1969 ASX listing. The company claims, as of its latest public description, to serve over 8.5 million customers across nearly 30 markets. Like NAB, ANZ is globally diversified but with a strong anchor in Australia and New Zealand.

The metrics worth noting here include:

• ANZ’s market cap came in just below NAB, at $115.06 billion, so it’s a touch smaller but still an absolute giant.
• Its latest dividend yield is 4.36%, incredibly close to NAB.
• Dividends total $1.66 per share based on the most recent data, but unlike NAB, ANZ dividends are only partially franked (most recently at 75%), and the franking rate has been trending lower in recent payments.

While ANZ’s payout and yield are virtually identical to NAB’s, the lower franking means the after-tax income for Australian investors could be less attractive.

Valuation comparison

Both NAB and ANZ trade on seemingly similar valuations, but there are a couple of fine points of difference. Here’s how they line up on the key income metrics:

	National Australia Bank	ANZ
Market Cap	$120.37 billion	$115.06 billion
P/E Ratio	19.36	19.28
Dividend Yield	4.39%	4.36%
Dividend per Share	$1.70	$1.66
Franking	100%	75%
Earnings per Share	2.000	1.973

NAB offers slightly higher dividends, fully franked, while ANZ’s payout is almost the same dollar amount but only 75% franked, so you might not pocket quite as much after tax. Their P/E ratios and EPS numbers are effectively matched, suggesting the market prices them on similar expectations.

Recent share price performance

Comparing share price activity until 22 September:

• National Australia Bank closed at $38.61 on 22 Sep 2026. Its year to date return is -6.5%, reflecting a moderate downturn over 2026 so far.
• ANZ Group Holdings closed at $38.15 on 22 Sep 2026. Its year to date return is a positive 6.9%, showing genuine strength versus NAB over the same period.

It’s clear that while both shares are trading at almost identical levels, ANZ has delivered solid positive momentum this year, whereas NAB has slipped backwards.

Which is the better buy?

If income is my main focus, I’d favour National Australia Bank over ANZ Group right now. Both offer near-identical headline dividend yields and similar payout levels, but NAB delivers 100% franking on its dividends — that’s a real edge for Aussie shareholders chasing the maximum after-tax income. The consistent franking, especially compared to ANZ’s recent trend of partial franking, makes a big difference come tax time.

On the other hand, ANZ is enjoying notably stronger share price momentum based on year-to-date returns. If total shareholder return (dividends plus price appreciation) is your true goal, ANZ’s recent outperformance could tip the scales, at least in the short term.

But for me, the promise of fully franked, reliable dividends still matters more than a few months of price action. Provided NAB can keep up its track record, it’s the better buy for an income investor in this big bank showdown.

The post NAB vs ANZ: Which big four bank is the better passive income stock? appeared first on The Motley Fool Australia.

More reading

• Here’s the dividend forecast out to 2028 for NAB shares
• How much superannuation do I need to earn $2,000 per week in passive income?
• Here are the most popular ASX share superannuation investments in SMSFs
• ANZ shares have climbed 13% in a year. Is there still room to run?
• Is NAB one of the best ASX dividend shares to buy?

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.

ASX dividend shares look more compelling following the passage of capital gains tax (CGT) changes into law, experts say.

Cost base indexation will replace the current 50% CGT discount for assets held longer than 12 months from 1 July next year.

The new rules grandfather existing ASX shares investments. So, the 50% discount will still apply to gains made before 1 July 2027.

After that date, capital gains on existing and new investments will be subject to cost base indexation.

A minimum 30% CGT tax rate will apply, too.

Income strategies looking better than growth: expert

Portfolio strategist Damien Boey from Wilson Asset Management says the CGT changes have already affected investors’ behaviour.

In an interview with Wilson chair and chief investment officer, Geoff Wilson AO, Boey said:

So it’s early days, but one of the things which we’ve noticed, particularly as we’ve been doing the rounds with shareholders, is that people have actually anticipated and responded to these changes.

So a lot of people … have decided that look, it’s not worth their while anymore to keep holding out for big capital gains. They’d rather actually go for much more income-based investment … there’s definitely a shift there for investors to prefer income over capital growth.

Wilson and Boey said buying and holding ASX shares for capital growth now looked less rewarding due to the 30% minimum CGT rate.

Boey said:

… The Australian Shareholders Association ran a survey a little while ago and what they showed was that over 40% of people are basically saying, look, I’m not so sure I want to invest in long-term equities any more as a result of these changes.

Wilson pointed out the significance of that percentage, given 7.7 million Australians invest in shares outside their superannuation.

Overseas markets may offer better capital growth

Boey also questioned how Australian capital growth would even materialise for investors given his expectation that the CGT changes would negatively impact already anaemic productivity growth.

The minimum 30% CGT rate also applies to businesses. This could disincentivise reinvestment and stifle productivity growth, he said.

This dynamic may encourage Aussie investors to continue putting their money into overseas share markets like the US for growth.

US stocks have delivered substantially more capital growth than ASX shares over the past three years.

“If I still have a preference for capital growth, then where am I going to get it? I have to go overseas,” Boey said.

He added:

… when you’re really starving the place of actual, real productivity growth, then what are you actually earning?

Where is the capital growth going to come from? What you’ll probably see is a big shift into income-based [products].

In Australia you’ve got to go for the most reliable income sources, particularly after inflation, and then if you want capital growth you really have to invest abroad.

Goal: $15,000 in passive income

In FY26, the ASX 200 provided an average dividend yield of 4.2%, so let’s use that as a guide.

If you only own ASX shares with full franking credits, that 4.2% yield grosses up to 6%.

To get $15,000 passive income per year, you’ll need about $250,000 in ASX dividend shares on a 6% yield.

Of course, that’s an oversimplification, because each individual ASX dividend share pays a different yield.

So, you’ll need to do your research.

You could try building a portfolio of several individual stocks which deliver a collective average 6% yield.

Some examples of ASX shares paying fully franked dividends include Wesfarmers Ltd (ASX: WES) and BHP Group Ltd (ASX: BHP).

There’s also Fortescue Ltd (ASX: FMG) and Commonwealth Bank of Australia (ASX: CBA) shares.  

Easier alternative to individual stock picking

Alternatively, you could invest in an ASX exchange-traded fund (ETF), ideally one with a high level of franking.

The most popular ASX dividend-focused ETF is Vanguard Australian Shares High Yield ETF (ASX: VHY).

VHY ETF has delivered a 10-year average annual distribution of 6.46% and growth of 4.03%.

This ETF’s franking levels have changed significantly from year to year.

In FY26, VHY ETF distributions came with 89% franking.

The post How much do I need in ASX dividend shares to receive $15,000 passive income per year? appeared first on The Motley Fool Australia.

More reading

• Buying CBA shares? Here’s the dividend yield you’ll get today
• Why I’d invest $50,000 of superannuation in New Hope, Mineral Resources and BHP shares
• Northern Star vs BHP: Which ASX share is better for passive income?
• If I invest $15,000 in Wesfarmers shares, how much passive income will I receive in 2027?
• Commonwealth Bank vs Westpac: Which ASX bank stock is the better buy for resilient passive income?

Motley Fool contributor Bronwyn Allen has positions in Vanguard Australian Shares High Yield ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Wesfarmers. The Motley Fool Australia has recommended BHP Group, Vanguard Australian Shares High Yield ETF, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

What a month it has been for Commonwealth Bank of Australia (ASX: CBA) shares. CBA stock has had one of its worst periods in a long time over the past two months or so.

Back in early August, this ASX 200 bank stock was going for over $180 a share. Today, those same shares are asking just $150.37 at the time of writing. That’s a fall worth a nasty 16.9% – even more than the precipitous 10% drop we saw back in May following a quarterly trading update.

But of course, many investors buy CBA shares for their dividend potential, not just an expectation of endless capital growth. And, as any good dividend investor knows, a lower share price means a higher starting dividend yield, all else equal.

So today, let’s dive into what kind of dividend yield you can expect from CBA shares at their current pricing.

CBA shares: Show me the money

Over the past 12 months, CBA has funded two dividend payments, as is its habit. The first of those came in February, with an interim dividend worth $2.35 per share. The second is the bank’s final dividend for 2026, which, coincidentally, will be doled out this week on 29 September. That payment will be worth $2.70 per share. Since CBA has already traded ex-dividend for this payment, we’ll use it as part of our yield calculations.

As is typical with Commonwealth Bank, both of its 2026 dividends will come with full franking credits attached.

2026 has been a bumper year for CBA’s dividend investors. Both of those payments represent healthy rises over their 2025 equivalents. The $5.05 in total dividends per share that the bank will pay out this year represents a 4.12% increase over the $4.85 paid out in 2025.

At CBA’s price of $150.37 (at the time of writing), that $5.05 in dividends per share gives this bank a trailing dividend yield of 3.36%. That’s still pretty low by ASX bank standards, but a lot better than the sub-3% yields investors may have become used to seeing on CBA shares when its price was markedly higher.

Of course, this is just a trailing yield, though. An investor who buys CBA shares today is not guaranteed to get that kind of yield. The bank will need to keep its 2027 dividend payments at least level with those paid out over 2026 to make this yield a forward-facing one. CBA has built up an impressive track record with dividend growth in recent years, with shareholders getting an annual dividend pay rise every year since 2021 (following the big COVID-induced cuts of 2020).

But only time will tell if that trend continues into 2027.

The post Buying CBA shares? Here’s the dividend yield you’ll get today appeared first on The Motley Fool Australia.

More reading

• Commonwealth Bank vs Westpac: Which ASX bank stock is the better buy for resilient passive income?
• How I’d build a $50,000 ASX share portfolio today
• CBA vs Telstra: Which ASX blue-chip is better for passive income?
• CBA shares hit their lowest level since February. Could $140 be next?
• Here are the most popular ASX share superannuation investments in SMSFs

Motley Fool contributor Sebastian Bowen 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.