Nobody is ever going to get National Bank of Canada (TSX:NA) confused with a sexy technology stock.

It’s as steady as it gets. The company increases revenue consistently by about 5% a year, bumping up earnings by a similar amount. This allows it to give investors an annual dividend raise while maintaining a payout ratio close to 50%.

Even National Bank’s competitors are more exciting than it is. CIBC recently announced a big U.S. acquisition. Bank of Nova Scotia continues its international expansion. And TD Bank is rumoured to be preparing a bid for U.S. discount brokerage Scottrade via its TD Ameritrade subsidiary.

Even though companies don’t get much more boring than National Bank, there are still plenty of reasons for it to have a permanent home in your portfolio.

Great valuation

National Bank stubbornly trades at a discount valuation versus its peers.

Shares currently have a trailing P/E ratio of 13.6–a number that’s been inflated because of a one-time write-off. Ignoring that charge, the trailing P/E is closer to 10.

Things get even cheaper on a forward earnings basis. Analysts expect the company to earn $5.01 per share in 2017, putting it at just 9.3 times forward earnings.

National also trades at a discount from a price-to-book-value perspective. The company has a current book value of $33.29 per share, giving it a price-to-book-value ratio of just 1.4. Its major competitors all have similar values between 1.7 and two times.

Fantastic dividends

Solid earnings have translated into a steadily increasing dividend.

A decade ago, National Bank was paying dividends of $0.27 per share. The dividend was then hiked to $0.31 per share, where it languished for a few years as the financial crisis happened. It wasn’t increased again until late 2010.

Since then, National Bank has been a dividend-growth machine. It has hiked the dividend 12 times–twice a year on average. The payout is currently $0.55 per quarter, which is good enough for growth of approximately 7% annually over the decade. The current yield is 4.7%, which sure beats the rate paid on most fixed-income investments.

Patient growth

National Bank’s management knows one of the reasons why it trades at such a low valuation is because it’s too focused on Canada. They’re working on changing that.

The company does have a few assets outside the country. It owns 24% of a bank in the Ivory Coast. It has a 17.5% stake in a bank in Mauritius. It owns 10.5% of Tenger Financial from Mongolia. And it’s the proud owner of 90% of ABA Bank in Cambodia.

These investments are worth approximately $380 million today. That’s peanuts for a stock worth nearly $16 billion.

This will likely change, although maybe not as fast as investors would like. The company is actively searching for acquisitions around the world, namely in developing markets with high GDP growth. It appears that slow growth is the plan. It’s not poised to make acquisitions worth billions, unlike its larger competitors.

Great long-term returns

National Bank has made many investors rich over the last 20 years. There’s no reason to believe this can’t continue for the next couple of decades.

Including reinvested dividends, National Bank shares have returned 14.79% annually since October 1996. Or, to put it another way, a $10,000 investment 20 years ago would be worth $158,184 today.

This investment would also be generating more than $7,400 in annual income from dividends alone.

The bottom line

There’s nothing sexy about National Bank. It’s simply a solid long-term performer–a company that will continue to slowly grow over the years.

That strategy has worked pretty well over the last 20 years. I doubt investors will be disappointed over the next 20.

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Fool contributor Nelson Smith has no position in any stocks mentioned.