Today is a good day to own National Australia Bank Ltd (ASX: NAB) shares.

While the big four bank's shares might be heading lower with the market when it opens later this morning, there's still a good reason to smile.

And no, it's not because the bank's shares are up almost 25% since this time last year. Though, that certainly is one reason to smile!

Why is it a good day to own NAB shares?

The reason why it is a good day for the bank's shareholders is that on Monday NAB will be rewarding them with their latest dividend payment.

That's if they were on its share registry before the ex-dividend date of 12 November.

What's being paid?

Last month, NAB released its full year results and revealed a 2% decline in revenue to $20.65 billion.

And on the bottom line, the big four bank reported an 8.1% decline in cash earnings to $7.1 billion.

Management revealed that this weaker performance was driven largely by lower net interest margins (NIM) and lower Markets & Treasury (M&T) income, which was partially offset by volume growth and higher fee income.

Commenting on the result, NAB's CEO, Andrew Irvine, said:

Our FY24 performance has benefitted from focused execution of our strategy and a more stable operating environment over the second half of the year. Cash earnings were 8.1% lower than the strong levels of FY23, but stable over 2H24 compared with 1H24.

Surprisingly, the NAB board didn't let its falling profits stop it from increasing its final dividend.

It elected to increase its dividend by 1 cent per share to 75 cents per share, which brought its fully franked total dividends for FY 2024 to $1.69 per share.

This fully franked final dividend is being paid to eligible shareholders today, giving them a nice income boost to support some last minute Christmas shopping.

What's next?

According to a note out of Morgan Stanley from last week, the broker believes that NAB will be in a position to pay its shareholders a slightly larger fully franked dividend in FY 2025.

The broker has pencilled in a dividend of $1.73 per share for the year ahead. Its analysts then expect the bank to lift this payout to a fully franked $1.83 per share in FY 2026.

Based on the current NAB share price of $37.57, this equates to dividend yields of 4.6% and 4.9%, respectively.

Morgan Stanley currently has an overweight rating and $38.40 price target on the bank's shares.