AFIC share price wobbles despite dividend hike

The Australian Foundation Investment Co Ltd (ASX: AFI) share price has had a bit of a case of the wobbles so far this Wednesday. AFIC shares closed at $7.47 yesterday and opened at that same pricing this morning before promptly falling down as low as $7.41.

At the time of writing, the listed investment company (LIC) has recovered and is right back to where it started today’s session at $7.47 a share.

This bouncy day for the AFIC share price comes after the venerable LIC revealed its latest results covering the half-year ended 31 December 2023 this morning before market open.

What did AFIC report for the half-year?

It was a bit of a mixed bag for AFIC today. The company reported that its portfolio returned 9% (including dividends and franking) for the six months to 31 December. That outperformed its benchmark – the S&P/ASX 200 Accumulation Index (ASX: XJOA) – which returned 8.3% over the same period.

AFIC’s portfolio also returned 1.6% in the 12 months to 31 December. That’s in addition to an average of 9.9% per annum over the preceding three years. This extends to 12% per annum over the last five and 8.7% over the past ten.

Some significant changes to AFIC’s investment portfolio during the half year include new positions in Mineral Resources Limited (ASX: MIN). The company also bought more shares of Telstra Group Ltd (ASX: TLS), National Australia Bank Ltd (ASX: NAB) and CSL Limited (ASX: CSL).

Meanwhile, AFIC sold down a number of shares too. Those included Woolworths Group Ltd (ASX: WOW), James Hardie Industries plc (ASX: JHX) and Ansell Ltd (ASX: ANN).

However, AFIC also reported a profit after tax of $150.1 million. That was down 8.3% from the $163.5 million reported over the same period in 2022.

Likewise, AFIC’s revenue from operating activities fell 5.4% to $168.4 million.

However, that didn’t stop AFIC from revealing an increase in its next dividend payment. Investors can look forward to bagging an interim dividend worth 11.5 cents per share, fully franked, on 26 February next month. That’s a 4.55% rise in the 11 cents per share payment shareholders enjoyed in February 2023.

Together with AFIC’s September final dividend of 14 cents per share (also fully franked), this will give AFIC shares a forward dividend yield of 3.41% at the current AFIC share price.

AFIC shares are now up 0.54% year to date. But still down 1.84% over the past 12 months.

The post AFIC share price wobbles despite dividend hike appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in CSL, National Australia Bank, and Telstra Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Ansell and CSL. 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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