I’m determined to build a large flow of dividend income in the years ahead. WCM Global Growth Ltd (ASX: WQG) is one of the main names I’m using to build passive income
When I’m thinking about building a stream of dividends, there’s normally a few factors I want to see.
For me, I’m looking for a strong dividend yield, a record of dividend growth, and strong prospects for further payout growth. Let’s run through why the listed investment company (LIC) ticks those boxes so effectively.
Good dividend yield
The ASX stock is already delivering impressive dividend payments to shareholders each year.
During the 2026 financial year, the LIC’s board of directors decided to pay investors four quarterly dividends during the year, totalling 8.52 cents per share.
At the time of writing, this trailing dividend yield translates into a dividend yield of 4% excluding franking credits and 5.8% including franking credits.
But that’s the past. I think investors should focus on what the business’s upcoming dividends could be, since those are the next payouts from the company.
Dividend growth
WCM Global Growth has an impressive dividend history with how it’s increasing its quarterly dividend payment every quarter.
The LIC recently announced its quarterly dividend for the quarter ended 30 June 2026 will be 2.35 cents per share.
It also announced what the next four quarters of dividends will be.
For the three months to September 2026, it will pay 2.45 cents per share.
For the three months to December 2026, it will pay 2.50 cents per share.
For the three months to March 2027, it will pay 2.55 cents per share.
For the three months to June 2027, it will pay 2.60 cents per share.
Those four dividends come to 10.1 cents per share, which translates into a grossed-up dividend yield of 6.9%, including franking credits, at the time of writing.
It also implies that the FY27 fourth quarter passive dividend income will be 10.6% higher than the FY26 fourth-quarter dividend.
Likely payout growth
Dividends are not guaranteed of course, but I think the investment style of the LIC makes it more likely that the business can deliver further dividend growth.
WCM is looking across the global stock market â a big hunting ground â for businesses that have an improving economic moat and a corporate culture that supports the strengthening of the economic moat.
One of the main ways that WCM measures whether a business is improving is looking to see whether it has a rising return on invested capital (ROIC).
Good investment returns make dividend growth much more likely, in my view.
Since the LIC’s inception in June 2017, its net return has averaged 15.6%. That’s been more than enough to pay good dividends and deliver capital growth.
$10,000 of annual passive income
Over the year ahead, I’m expecting WCM Global Growth to pay 10.1 cents per share over the next year.
If the LIC delivers that, then it would require 99,010 WCM Global shares to unlock $10,000 of annual passive income. I think that’d be a compelling investment to make because of the high-quality, global portfolio that it would come with and the pleasing level of passive income.
The post I’d buy 99,010 shares of this ASX stock to aim for $10,000 of annual passive income appeared first on The Motley Fool Australia.
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Motley Fool contributor Tristan Harrison has positions in Wcm Global Growth. 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.