2 ASX Stocks I Would Choose Over CBA in December 2023

Investing in the Australian stock market involves navigating through a sea of options, and Commonwealth Bank of Australia (ASX: CBA) shares have long been a favorite among ASX investors. As the largest bank on the ASX and a renowned dividend payer, CBA has enjoyed substantial popularity. However, in this December edition, let's explore why two alternative investments, National Australia Bank Ltd (ASX: NAB) and VanEck Vectors Wide Moat ETF (ASX: MOAT), might just steal the spotlight.

Why Consider National Australia Bank Ltd (ASX: NAB) Over CBA?

Dividend Potential

While CBA remains a stalwart in the banking sector, NAB offers a compelling alternative, especially when considering potential dividends. As of the latest data, CBA provides a trailing dividend yield of 4.35%, whereas NAB takes the lead with a robust trailing yield of 5.94%. This translates to more than a 36% increase in income for NAB investors.

Business Dominance

Acknowledging CBA's significant size and scale, NAB stands out as a well-run bank on the ASX. Its dominance in the business banking sector, where competitors struggle to make an impact, adds to its appeal. Despite CBA's towering presence, NAB's strategic positioning makes it a strong contender for investors seeking stability and growth.

Attractive Pricing

While an ideal scenario would have been to acquire NAB shares at the ~$25 levels witnessed in June, the current pricing of just over $28 still presents an attractive proposition. The slight premium is justified by NAB's performance and potential dividends, making it a favorable choice over CBA in the current market landscape.

VanEck Vectors Wide Moat ETF (ASX: MOAT): A Unique Investment Opportunity

Buffett-Inspired Investment Strategy

For those looking beyond traditional banking stocks, the VanEck Wide Moat ETF emerges as an intriguing option. Inspired by Warren Buffett's philosophy, this ETF exclusively invests in companies, primarily American, demonstrating a wide economic moat. A moat signifies a competitive advantage, be it a robust brand, cost efficiency, or a product or service difficult for customers to pivot away from.

Notable Holdings

The ETF's portfolio boasts renowned companies such as Nike, Disney, Amazon, Kellanova (Kellogg), and even Buffett's own Berkshire Hathaway. These companies exemplify the concept of a wide economic moat, securing their positions at the pinnacle of their respective industries.

Impressive Returns

Investors in the VanEck Wide Moat ETF have been rewarded with impressive returns. As of October 31, the average annual return over the past five years stands at an enviable 14.31%. This surpasses the performance witnessed by CBA shareholders during the same period.

Decoding the Investment Landscape: Navigating Beyond CBA

In the intricate world of investments, the allure of NAB and the VanEck Vectors Wide Moat ETF beckons. While ASX CBA shares have long been a reliable choice, exploring alternatives that offer higher dividends, strategic dominance, and unique investment strategies might be the key to unlocking greater returns.

Conclusion

As December unfolds, investors are presented with a choice: stick with the familiar or venture into the promising realms of NAB and the Wide Moat ETF. Diversification often proves to be the path to prosperity, and these alternatives provide a compelling narrative for those seeking growth and stability beyond the conventional.