Retirees may be looking for ASX dividend shares that can provide a good dividend yield and consistency. I think one of the top stocks investors should consider is WCM Global Growth Ltd (ASX: WQG).
I regularly highlight this stock because I truly believe it’s one of the best ASX options for passive income in both the short and long term.
This business operates as a listed investment company (LIC). An LIC invests in shares or other assets on behalf of shareholders, which I think is useful because it provides exposure to shares we may not already own.
WCM Global Growth is an LIC that owns a portfolio of between 20 and 40 stocks that the investment team believes are quality global companies, primarily in high-growth consumer, technology, and healthcare sectors.
In my view, there are three great factors for retirees to love this ASX dividend share.
Appealing portfolio
I think WCM Global Growth’s investment strategy is really effective at generating returns.
It goes without saying that past performance is not a guarantee of future returns. Having noted that, the WCM Global Growth portfolio’s net return has been 15.6% per year since its inception in June 2017. That’s strong long-term performance and can support solid dividend income.
The fund doesn’t just invest in any international company; it only invests in quality businesses that are improving.
There are two factors WCM looks for when investing.
First, it’s looking for businesses with a strengthening competitive advantage, which could also be described as an expanding economic moat. Competitive advantages can come in a variety of forms, such as cost advantages, intellectual property (IP), network effects, and so on.
One of the main ways WCM measures whether competitive advantages are strengthening is by tracking whether return on invested capital (ROIC) is rising.
The LIC also wants to see that the company has a corporate culture that supports the expansion of the economic moat. WCM thinks culture is the key determinant of a company’s ability to deliver a consistently growing moat. It has developed a proprietary approach to analysing corporate culture.
By using this strategy, it has built a portfolio that’s spread across the Americas, Europe, and the Asia Pacific.
Large dividend yield
WCM Global Growth is very transparent about the dividends it intends to pay, making it easy to see what the dividend yield for the year ahead could be.
The ASX dividend share has announced it intends to pay quarterly dividends totalling 10.1 cents per share between now and September 2027.
At the time of writing, that forecast payout translates into a dividend yield of 5% excluding franking credits and 7.1% including franking credits.
I think most retirees would be happy with that yield, particularly when combined with the pace of growth of the dividends.
Growing payments
WCM Global Growth has a stated progressive dividend policy.
It started paying a dividend in FY19, and it has grown it every year since then. In 2023, it started paying dividends quarterly and has hiked the payment every quarter since then.
The quarterly dividend for September 2026 was 41.6% higher than the quarterly payment for September 2023. It has guided that the September 2027 payment will be 10.6% higher than the September 2026 payment.
I believe the ASX dividend share’s payout can continue to grow at a pleasing pace and be very rewarding for retirees.
The post Why this ASX dividend share is a retiree's dream for 2027 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.