Is Whitefield Limited (ASX: WHF) the best ASX dividend share? It just grew its dividend in its FY20 result.
What is Whitefield?
Whitefield is a listed investment company (LIC). It’s one of the oldest on the ASX, it has been around since 1923.
Why Whitefield might be one of the best ASX dividend shares
It can point to a record of dividends that have been maintained or grown every year over the past 25 years.
In today’s FY20 result the LIC declared a final dividend of 10.25 cents per share, compared to 10 cents per share last year. That is in addition to the 10.25 cents per share it paid as the interim dividend, compared to the prior year’s 9.75 cents per share.
That brings the FY20 grossed-up dividend yield to 6.6% at today’s share price. I think that’s a solid yield in today’s environment.
FY20 result
The ASX dividend share announced an operating profit after tax of $17.66 million. This equated to earnings per share (EPS) of 17.8 cents, a decrease of 3.7%.
Whitefield said that the financial year to March saw two periods. The first 10 months of the year saw moderately widespread dividend and distribution growth from a majority of shares in the portfolio. There was some weakness in the financial and banking sectors. However, the emergence of COVID-19 and the containment measures in February and March meant companies began to cut or defer dividends to preserve cash. I think we’re likely to see cuts for the next 12 months.
Some of the businesses that delivered distribution growth was Brambles Limited (ASX: BXB), ASX Ltd (ASX: ASX) and Medibank Private Limited (ASX: MPL).
Whitefield’s portfolio return for the full year amounted to a negative 8.88%. This outperformed the S&P/ASX 200 Industrials Accumulation Index by 3.15%. I think that’s a solid performance.
Whitefield’s outlook
The ASX dividend share said that the outlook is dominated by COVID-19. I don’t think that’s surprising. Remember its profit is determined by investment returns. The near-term is full of uncertainty and the financial impacts are “profound”. Whitefield said there is likely to be a very material downturn in both 2020 and 2021.
Whitefield expects to maintain its dividend in the December 2020 result, but said investors should be aware it may have to review its dividend payments if conditions continue to deteriorate.
Seeing as Whitefield is currently trading at around its net asset value, I’m not in a rush to say it’s a buy. But I think Whitefield is one of the best ASX dividend share ideas for conservative income.
But I’d much rather buy this ultra-defensive dividend share for long-term income instead.
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More reading
- 2 ASX shares I would buy for growth and income
- Should ASX investors just buy ETF index funds for better returns?
- Where to invest $500 in ASX shares right now
- ASX 200 climbs 1% in positive start to the week
- Why this overlooked ASX 200 stock just got upgraded by 3 leading brokers to “buy”
Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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