NAOS Ex-50 Opportunities Company Ltd (ASX: NAC) is a listed investment company (LIC) that looks to invest in relatively small businesses on the ASX. Its target range is businesses worth between $400 million to around $1 billion.
It has a bias towards industrial businesses and looks to keep a concentrated portfolio of high-conviction ideas. At the end of September 2018 it had 12 holdings and 7.2% of the portfolio was cash. I like the strategy of only investing in shares you really believe are good ideas.
Over the past three years its portfolio has delivered an average return per annum of 16.76% after expenses, but before fees. There are few investment managers that have generated as strong of a gross performance as this over the past three years on the ASX.
Some of its current key investments include Reece Ltd (ASX: REH) and Helloworld Travel Ltd (ASX: HLO), both of which I think have good growth potential.
A key reason to consider this Naos LIC is that it aims to pay out a steadily-growing dividend. It has indeed paid out a growing dividend since the second half of FY15. It has recently switched to paying dividends quarterly, which should help shareholders' cashflow.
It currently has a grossed-up dividend yield of 7.6%.
Some investors may not like the fees compared to some of the old LICs, however its benchmark was recently changed to the more relevant S&P/ASX 300 Industrials Accumulation Index.
Foolish takeaway
Based on the just-announced September 2018 NTA update, it's trading at a sizeable 10.6% (or perhaps slightly more now) discount to the pre-tax NTA. Investors focused just on income could consider this LIC as part of a portfolio of dividend shares.
