There are not many ASX stocks that I like as much as MFF Capital Investments Ltd (ASX: MFF) for passive income. Its dividend record, the size of the dividend increases, and the diversification it provides, are all compelling reasons to consider the business.
I like the idea of owning a diversified portfolio of ASX stocks, but many of the available businesses have operations focused on Australia (and New Zealand). There’s not much geographic diversification for the earnings.
MFF offers everything I’m looking for, which is why I’ve made it one of the largest passive income investments in my portfolio.
Let me explain further.
Excellent diversification
When we buy many ASX shares, we’re buying a small slice of a single business.
MFF’s main value is concentrated in a portfolio of global shares. One of MFF’s main goals is medium-term compounding and seeking to avoid permanent capital losses.
Its portfolio includes a number of excellent businesses that have global earnings with incredible economic moats such as MasterCard, Alphabet, Visa, American Express, Meta Platforms, Amazon, Home Depot and Microsoft.
MFF’s portfolio has a strong track record of performance. Winners have a habit of winning over the long-term, particularly if they continue investing in their products/services.
I’m excited by the long-term potential of MFF’s portfolio and how this can drive the overall shareholder returns for investors.
MFF’s ability to generate investment returns plays a big part in the attractiveness of its passive income.
Passive income of $1,000 per year
Pleasingly, the business has a very good record of paying dividends to investors. It has increased its regular annual dividend each year between 2017 and 2025. Not many large ASX stocks can say that.
MFF’s other main goal is to increase its fully franked dividend over time and I’m confident the business will increase its payout in FY26.
The ASX stock has a strong track record of growing its payout at a strong rate over the last several years. In FY25 alone, the business decided to increase its annual dividend by just over 30% to 17 cents per share.
But, for my calculation of receiving $1,000 of passive income, I’m going to use the payout figure from FY25.
To receive $1,000 of annual cash passive income with the 17 cents per share, we’d need 5,883 MFF shares. But, if we include the franking credits as part of that income goal, we’d only need 4,118 shares.
The ASX stock still trades at decent value
Is this a good time to invest? The business regularly tells investors about its underlying value regularly.
At 9 January 2026, it had approximately $5.40 of pre-tax net tangible assets (NTA). At the time of writing, it’s trading at an attractive single-digit discount to this valuation. I like being able to buy shares for less than they’re worth.
The post I’d buy 5,883 shares of this ASX stock to aim for $1,000 of annual passive income appeared first on The Motley Fool Australia.
Should you invest $1,000 in Mff Capital Investments right now?
Before you buy Mff Capital Investments shares, consider this:
Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Mff Capital Investments wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
And right now, Scott thinks there are 5 stocks that may be better buys…
* Returns as of 1 Jan 2026
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More reading
- Why this 3.3% dividend yield might be a rare passive income opportunity
- 10 ASX shares I’d buy with $10,000 in 2026 to beat the market
- 31%: This could be the best dividend growth stock on the ASX
- $20,000 in excess savings? Here’s how to try and turn that into a second income in 2026
- 5 ASX shares I want to buy in 2026
American Express is an advertising partner of Motley Fool Money. Motley Fool contributor Tristan Harrison has positions in Mff Capital Investments. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Home Depot, Mastercard, Meta Platforms, Microsoft, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Alphabet, Amazon, Mastercard, Meta Platforms, Mff Capital Investments, Microsoft, and Visa. 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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