Fund manager Contango Asset Management is launching a listed investment company which will focus on generating income for shareholders.
Contango already has a solid track record established from its management of the $170 million LIC Contango Microcap Ltd (ASX: CTN), so no doubt the combination of the fund manager's investment record and the appetite of investors for yield in this low interest rate environment will see many investors – including self-managed super funds – support the new LIC.
Contango Income Generator Limited aims to generate a yield on its net tangible asset backing of "not less than 6.5%". Here are five stock positions which the fund manager has identified to help achieve its yield objective.
- Bank of Queensland Limited (ASX: BOQ): According to data provided by Morningstar the stock is trading on a financial year (FY) 2016 fully franked dividend yield of 6%.
- Bendigo and Adelaide Bank Ltd (ASX: BEN): Forecasts suggest the bank is offering shareholders a FY 2016 fully franked dividend yield of 5.5%.
- IOOF Holdings Limited (ASX: IFL): While the headlines for this wealth manager haven't been good lately, the stock is forecast in FY2016 to pay a fully franked dividend yield of 6.7%.
- McMillan Shakespeare Limited (ASX: MMS): Investors have the opportunity to acquire this leading salary packaging and novated leasing provider on a forecast FY 2016 fully franked dividend yield of 4.8%.
- Tatts Group Limited (ASX: TTS): Gambling and entertainment group Tatts should provide shareholders with a steady stream of dividends. Based on forecasts for FY 2016, the stock is yielding 4.5%.
