Hoping to bag the supersized AFIC dividend? You’d better be quick

The Australian Foundation Investment Co Ltd (ASX: AFI), or AFIC for short, is an ASX-listed investment company (LIC) that has always had a strong reputation for providing dividend income.

AFIC has been around for decades. Before the emergence of the exchange-traded fund (ETF), LICs like AFIC were one of the only ways to access a diversified portfolio of blue-chip ASX shares, managed on investors’ behalf.

Although ETFs have come along and given investors choice in this area, AFIC is still chugging along. The LIC has managed to give investors an average return of 9.8% per annum over the past ten years. That return includes the value of AFIC’s dividends.

So AFIC has paid out two dividends per year for decades now. Unlike many ASX dividend shares, AFIC didn’t skip any shareholder payments during the worst years of the global financial crisis, or the pandemic.

And its latest interim dividend is coming investors’ way.

AFIC’s supersized interim dividend is inbound

Back on 23 January, AFIC delivered its half-year earnings report. This included the announcement that the company would hike its interim dividend for the first time in many years.

In 2022, investors enjoyed an interim, fully franked dividend of 10 cents per share. That’s the same payout AFIC had doled out every February since 2016.

But this year, the company announced a big hike to its interim dividend. Investors can now look forward to receiving 11 cents per share, fully franked, on 24 February next month. That’s a 10% increase over 2022’s interim dividend payment.

However, if an investor wishes to secure this dividend payment, then they had better be quick. AFIC is scheduled to trade ex-dividend for this payment this Thursday, 2 February.

That means that any investors who don’t hold AFIC shares by that date will miss out on this upcoming dividend. So you’ve got today’s session, and tomorrow’s to buy AFIC shares if you want to bag this dividend.

Thus, we can expect a big drop in the AFIC share price on Thursday, reflecting the value of this dividend leaving the market.

This latest dividend will give AFIC a dividend yield of 3.24%, based on the current share price of $7.71 (at the time of writing).

The post Hoping to bag the supersized AFIC dividend? You’d better be quick appeared first on The Motley Fool Australia.

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More reading

• 3 ASX All Ords shares trading ex-dividend this week
• AFIC share price jumps on 10% dividend hike

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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