If you own shares in Argo Investments Limited you need to know this

Credit: Nicki Manix

The share price of listed investment company (LIC) Argo Investments Limited (ASX: ARG) has firmed 1.7% in early trade on Monday morning after the $5.2 billion company reported strong half-yearly results.

Here’s what shareholders need to know:

  • Profit grew 8.9% to $114 million on the prior corresponding period (pcp) thanks largely to higher dividends and distributions from the group’s portfolio of investments
  • Earnings per share increased 7.6% to 17 cents per share (cps)
  • A fully franked interim dividend of 15 cps has been declared, this represents growth of 7.1% on the pcp. The shares will trade ex-dividend on February 11 with payment scheduled for March 4.
  • Net tangible asset (NTA) backing per share declined by 1.1% to $7.28
  • For the 12 months ending December 31, Argo’s portfolio returned 2.8% which was a slight outperformance against its benchmark the S&P/ASX 200 Accumulation Index
  • Amongst the top performing holdings within the portfolio were automotive dealership group AP Eagers (ASX: APE), global investment bank Macquarie Group Ltd (ASX: MQG) and private hospital operator Ramsay Health Care Limited (ASX: RHC)
  • The largest purchase made during the six months ending December 31 was $21.4 million spent on shares in Westpac Banking Corp (ASX: WBC)
  • Two other notable purchases for the portfolio during the half year were New Zealand-based insurer CBL CORP FPO NZ (ASX: CBL) and newly-listed real estate agency Mcgrath Ltd (ASX: MEA)

Foolish takeaway

With an historic track record of outperforming the market and a diversified portfolio of quality companies, Argo is an easy way for investors to gain wide exposure to the ASX.

It’s worth noting however that at its current share price around $7.70, shares in Argo are trading at a meaningful premium to its NTA backing.

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Motley Fool contributor Tim McArthur has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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