Wilson Asset Management has seven leading listed investment companies. These include WAM Capital (ASX: WAM), WAM Global (ASX: WGB), WAM Microcap (ASX: WMI), WAM Leaders (ASX: WLE), WAM Research (ASX: WAX), WAM Active (ASX: WAA) and Century Australia (ASX: CYA). WAM Global IPO by the parent group also got oversubscribed. WAM Global Chairman, Geoff Wilson AO commented that they got solid response from current investors that helped exceed the $330 million target with IPO ultimately raising $466 million. Looking at the sub-groups, we believe that WAM Capital and WAM Microcap could be attractive dividend stocks for future.
WAM Microcap Ltd
WAM Microcap Limited (ASX:WMI) manages a diversified portfolio of undervalued growth companies with a market capitalization of less than $300 million.
Outperformance against benchmark: WAM Microcap managed to beat the S&P/ASX Small Ordinaries Accumulation Index by 7% since its inception at June 2017 (as of 30 June 2018 Investment update). WMI Investment Portfolio delivered 2.2% returns in the last one month as compared to 1.1% returns of S&P/ASX Small Ordinaries Accumulation Index (as of 30 June 2018 Investment update). WMI Investment Portfolio managed to deliver 28.9% returns in the last one year as compared to S&P/ASX Small Ordinaries Accumulation Index returns of over 24.2%.
Dividend player: The group tethers returns based on enhancing stream of fully franked dividends to its shareholders, while maintaining adequate profit reserves along with franking credits. The receipt of franked dividends from investments helps in deciding on franking credits along-side the dependence on tax payments. On 27 April 2018, the group paid a fully franked interim dividend of 2.0 cents per share (cps) to shareholders. Annualised fully franked interim dividend of 4 cents per share was revealed. The shares of WMI rose over 1.8% in the last four weeks (as of August 1, 2018).
Diversified portfolio (Source: company reports)
WAM Capital Ltd
WAM Capital Limited (ASX: WAM) offers investors to have an exposure to an actively managed diversified portfolio that is based on small-to-medium sized industrial companies.
Attractive portfolio returns: WAM Capital has also been successful in offering lucrative returns to investors with WAM Investment Portfolio generating over 17.5% returns against S&P/ASX All Ordinaries Accumulation Index returns of over 8.5% since its inception in August 1999 (as of June 2018 update). WAM Investment Portfolio delivered over 4.1% returns in the last six months almost on par with S&P/ASX All Ordinaries Accumulation Index which generated 4%, but beat the S&P/ASX All Ordinaries Accumulation Index by 6.5% pa and 8.8% pa in the last three years and ten years generating over 16%pa and 16.4%pa returns.
Dividend player: The key aspect with WAM is also revolving around the stream of fully franked dividends that the group intends to have as a return to its shareholders based on financial performance. Similar to WAM Microcap, WAM Capital’s ability to generate franking credits falls back on franked dividends from investments and the tax payments. WAM Capital has paid 215.3 cents per share in fully franked dividends to shareholders since its inception.
Fully franked dividends’ rise over the years (Source: company reports)
The shares of WAM rose over 1.3% in the last three months (as of August 01, 2018) and has a solid dividend yield of 6.3%.
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