WAM Research Limited reports: Dividend increased by 5.6%

WAM Research Limited (ASX: WAX) has reported its result for the half-year period to 31 December 2017.

WAM Research is one of the listed investment companies (LICs) run by Wilson Asset Management. It focuses purely on the underlying quality of the businesses that it’s investing in.

The LIC announced an operating profit before tax of $20.4 million and an operating profit after tax of $15.1 million.

The WAM Research investment portfolio for the six months grew by 9.8% and delivered that with less volatility as it kept an average cash balance of 28.2%. This compares favourably to the S&P/ASX All Ordinaries Accumulation Index which rose by 9.3%.

The net tangible assets (NTA) per share, after adjusting for dividends, increased by 7.8% for the six months.

WAM Research Chairman, Geoff Wilson, said “The best performing stocks for the period were Afterpay Touch Group Ltd (ASX: APT) and Smartgroup Corporation Ltd (ASX: SIQ)” among others.

The key statistic that most investors are interested in is the dividend, which was increased by 5.6%.

Mr Wilson said “WAM Research continues to deliver on its commitment to providing shareholders an increasing stream of fully franked dividends”.

WAM Chief Investment Officer, Chris Stott, said there could be further uncertainty after the February correction “We are almost nine years into the current global equity bull market and risk has appeared mispriced for some time. The correction in valuations and heightened volatility the market is experiencing is indicative of investors’ uncertainty.”

“We remain cautious about the direction of the equity market and have recently increased our cash weighting to 43.9%.”

Foolish takeaway

WAM Research delivered on its key objective of increasing the dividend whilst delivering a market-beating performance. If we assume another 4.75 cent per share dividend in six months the forward grossed-up dividend yield is currently sitting at 8.7%.

I think WAM Research is a top quality dividend stock and well worth a place in an income-seeker’s portfolio.

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Motley Fool contributor Tristan Harrison owns shares of WAM Research Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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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