Last week, the third largest Australian LIC, Milton Corporation, announced its earnings results for the financial year just ended.
The company generated net profit after tax of $130 million, up 6.2% from last year. On a per-share basis, earnings grew by 5.3%. This is as a result of Milton receiving higher dividends from over two-thirds of its investment portfolio, which reflects the broadly positive results from Australian enterprise this year.
In turn, the company decided to increase the final dividend paid to shareholders by 2%. That’s now the 8th consecutive increase in the yearly dividends.
Milton’s Managing Director, Mr Frank Gooch said: “Fully franked dividends are incredibly important to many of Milton’s 25,000 shareholders, particularly those who rely on the increased fully franked dividend to either help fund their day to day living expenses or to help them save for their retirement. It is therefore especially satisfying to once again increase the full year ordinary dividend”.
A couple of portfolio moves made by Milton included;
Increasing its stakes in AGL Energy Ltd (ASX: AGL) and Woodside Petroleum Limited (ASX: WPL). While on the sell side, the company completely offloaded its positions in AMP Limited (ASX: AMP), BWP Trust (ASX: BWP) and Origin Energy Ltd (ASX: ORG).
The value of the investment portfolio increased by 4.9% per share over the year, to a total of $2.93 billion, across 86 companies.
While Milton may look boring to some, I believe that’s its best feature.
The company is conservatively managed, cost conscious, and focused on holding long-term stakes in a diverse group of profitable businesses, which it expects will deliver sound dividend growth.
Personally, I’m happy to hold this LIC as a core holding in my portfolio. Due to its diversity, an investment in Milton is really a broad bet on the future of the economy and Australian business as a whole.
The company has managed to deliver solid returns and steadily increasing dividends for many decades, and I don’t expect that to change anytime soon.
If you’re looking for more shares with increasing dividends, check out the report below.
It's been a nail-biter of a reporting season here in the first half of 2018.
But the real action, in my opinion, is what companies are doing with dividends.
What does this mean for you? Well there is one stock I've found that could very well turn out to be THE best buy of 2018. And while there's no such thing as a 'sure thing' when it comes to investing - this ripper might come as close as I've ever seen.
Motley Fool contributor Dave Gow owns shares of Milton Corporation Limited. 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 Scott Phillips.