A 3.5% ASX dividend stock paying cash every month

Over the past few months, we’ve been looking at the dividend stocks on the ASX that pay out income every single month.

Monthly dividend payers are a rare breed in Australia. Biannual dividend shares that fork out two payments per year are the norm, while quarterly dividend stocks are less common. But there are only a handful of monthly dividend payers. Let’s talk about another one that has only joined the ASX recently.

That monthly dividend payer is WAM Income Maximiser Ltd (ASX: WMX).

WAM Income Maximiser is a listed investment company (LIC) run by the LIC-focused Wilson Asset Management (WAM). It began ASX life in May last year, debuting at $1.50 a share. The company is currently up 8% from that IPO price at $162 at the time of writing.

Like most LICs, WAM Income Maximiser invests in an underlying portfolio of assets that it manages on behalf of its investors. In this case, that portfolio consists of both ASX shares and corporate debt instruments. The ASX shares are mostly blue-chip dividend stocks, including (as of the latest data) BHP Group Ltd (ASX: BHP), CSL Ltd (ASX: CSL), Woolworths Group Ltd (ASX: WOW), Medibank Private Ltd (ASX: MPL), and Macquarie Group Ltd (ASX: MQG). This portion of WAM Income Maximiser’s assets accounts for about 73.3% of the entire portfolio.

The corporate debt component makes up another 26.7% of the portfolio. 54% of the debt is classified as either A- or AAA-rated debt, with 28% rated at BBB and the last 18% consisting of hybrid assets.

Together, these shares and debt assets provide WAM Income Maximiser with investment income, which it passes through to investors as fully-franked dividends.

How much monthly income does this ASX dividend stock pay out?

WAM Income Maximiser paid out its first dividend in August last year and has paid a monthly dividend ever since. As we haven’t yet had a full 12 months of income, we cannot come to an accurate annual dividend yield figure as of yet. But we’ll attempt some creative accounting regardless.

WAM Income Maximiser’s first dividend, paid out on 29 August 2025, came to 0.2 cents per share. Each month, the LIC has increased its payouts by 0.5 cents. Investors bagged 0.25 cents per share in September, 0.3 cents in October, and so on. The company has provided guidance that its January dividend (set for payment on 30 January) will be worth 0.45 cents per share. That will be followed by a 0.5-cent per share payout in February and a 0.55-cent dividend in March.

There are two potential paths we can anticipate here. Assuming WAM Income Maximiser continues on its past trajectory, the company could pay a 0.6-cent-per-share dividend in April, 0.65 cents in May, and so on. Once August rolls around, investors will have received a total of 5.7 cents per share in dividends. That would result in the company trading at a dividend yield of 3.52% today.

More conservatively, we can take an average of the dividends WAM Income Maximiser has already paid out and apply that to the next few dividends. That average is 0.38 cents per share, which, if applied ot the current share price, would give this monthly dividend stock a yield of 2.79% today.

Would I buy this monthly ASX dividend stock?

Monthly dividend payers have a certain (and understandable) appeal amongst ASX investors. However, I wouldn’t be buying this particular one. For one, WAM Income Maximiser hasn’t gotten off to a great start, underperforming the S&P/ASX 200 Index (ASX: XJO) since its inception. Sure, a period of less than 12 months is arguably not enough time to rule out a stock for performance reasons. But this is not my only concern.

Wilson Asset Management has a patchy track record when it comes to the performance of its LICs. We’ve looked at the underwhelming return that its flagship WAM Capital Ltd (ASX: WAM) has delivered before. WAM Capital has been a disappointing investment for a long time now, with its shares currently down 18.8% over the past five years. WAM Research Ltd (ASX: WAX) has lost 22.1% over that same period, while WAM Global Ltd (ASX: WGB) shares have lost 0.4%.

Before WAM Income Maximiser’s debut, Wilson Asset Management launched WAM Strategic Value Ltd (ASX: WAR) in 2021. This LIC is down almost 16% from its 2021 debut at today’s pricing.

WAM Income Maximiser also charges a relatively expensive fee. Investors pay 0.88% per annum to have their money in this LIC. Additionally, they are slugged an additional 20% performance fee if the fund outperforms a benchmark. That benchmark is calculated using 60% of the S&P/ASX 300 Accumulation Index and 40% of the Bloomberg AusBond Bank Bill Index. That means that WAM Income Maximiser can underperform the broader Australian stock market and still collect a performance bonus from its shareholders.

Foolish takeaway

Weighing all of this up, I would prefer to invest in cheaper monthly ASX dividend stocks that don’t charge performance fees like WAM Income Maximiser. Two of my favourite monthly payers are Plato Income Maximiser Ltd (ASX: PL8) and the BetaShares S&P Australian Shares High Yield ETF (ASX: HYLD). Both offer monthly payouts but with far lower fees. Over time, this factor alone will probably make a significant difference for investors.

The post A 3.5% ASX dividend stock paying cash every month appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in CSL and Plato Income Maximiser. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL and Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group and Woolworths Group. The Motley Fool Australia has recommended BHP Group and CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.