National Australia Bank Ltd (ASX: NAB) is one of Australia's big four banks and one of the largest companies in the country.
Lots of investors buy shares in all four big banks, but I don't think that's a good strategy. I think it's better to buy shares in your favourite bank.
Here's why NAB is my favourite bank:
Less exposure to the risky mortgage market
NAB has less exposure to the Australian property market compared to Westpac Banking Corp (ASX: WBC) and Commonwealth Bank of Australia (ASX: CBA).
The housing market is beginning to show worrying signs of slowing down, which could spell trouble for heavily indebted homeowners with rising interest rates.
Australia and New Zealand Banking Group (ASX: ANZ) had the highest percentage of inaccurate loan applications according to a UBS survey.
Focusing on growing businesses
NAB has been focusing on business lending and business pursuits more than its competitors. There will always be some areas of the economy that are growing and NAB has found them.
Management are making good moves by working with businesses like Xero FPO NZX (ASX: XRO) and REA Group Limited (ASX: REA).
Withdrawn from overseas markets
NAB used to have a large presence overseas in the UK and the USA. However, now that it's withdrawn it offers shareholders a safer and simpler investment option.
Foolish takeaway
NAB is currently trading at 13x FY18's estimated earnings with a fully franked dividend yield of 6.35%.
I'm not a buyer of NAB at today's price but I can understand why investors would choose it for its large income potential.
