Bki Investment Co Ltd (ASX: BKI) is a listed investment company (LIC) with a portfolio valued at approximately $1 billion.
While Bki might not be that well known, its previous "parent" Brickworks Limited (ASX: BKW) certainly is and Bki's management operate in a similarly conservative way to Brickworks.
Bki's investment approach has led to impressive long-term outperformance.
Over the past 12 years, total shareholder returns (TSR) including franking credits have been 11.3% per annum (pa). That's a beat of 1.7% pa above its benchmark.
With returns such as these, the Bki portfolio is arguably one worth monitoring for generating ideas.
Given Bki's particular focus on owning stocks that provide income, the portfolio's stock holdings could be particularly interesting for dividend-seeking investors.
Here are four of the main purchases and sales that were made across the portfolio during financial year 2016.
- Purchases – Telstra Corporation Ltd (ASX: TLS) and APA Group (ASX: APA)
- Sales – BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO)
So why did Bki make these specific buy and sell decisions?
Part of the answer probably lies in the outlook for the respective dividend payments from these four stocks.
According to analyst forecast data supplied by CommSec, Telstra's fully franked dividend is expected to grow by 1 cps in financial year (FY) 2017 to 32.5 cents per share (cps).
Likewise, APA is expected to increase its unfranked dividend by around 3 cps to 44.4 cps in FY 2017.
In contrast, BHP's dividend slumped by around 75% in FY 2016 and is forecast to grow a little in FY 2017, but it will still be around two-thirds lower than the rate paid in FY 2015.
Meanwhile, the decline in dividend payments doesn't look over yet for Rio's shareholders, with forecasts suggesting further declines in FY 2017.
