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HY20 result: Global dividend share increases dividend by 11%

Global dividend share PM Capital Global Opportunities Fund Ltd (ASX: PGF) just reported its half-year result to 31 December 2019 and grew its dividend by 11%.

What is PM Capital Global Opportunities Fund?

It’s a listed investment company (LIC) which gives investors the opportunity to get exposure to global shares through a business listed on the ASX.

It looks to have a portfolio of around 40 global companies which are cheaper than their intrinsic value. PM Capital, the fund manager, has been operating a global investment strategy since 1998.

The LIC can invest anywhere in the world into whatever sector it wants at almost any market capitalisation. This investment flexibility gives PM Capital a wide range of opportunities. 

PM Capital Global Opportunities Fund’s half-year numbers

The LIC reported a net profit of $44.4 million for the six months to 31 December 2019, an improvement from the loss of $41.4 million in the prior corresponding period.

The results of LICs can seem confusing because they deliver investment returns, a return of -5% can seem bad in an absolute dollar sense compared to last year’s result, whilst generating a return of 10% in one year and 20% in another year shows profit doubling in dollar terms. LIC profits aren’t consistent like normal operating businesses.

Its net tangible asset (NTA) return before tax accruals for the six months to December 2019, including the September 2019 dividend, was 12%.

It currently holds shares in businesses like Visa, copper miners, European house builders and international banks. 

PM Capital Global Opportunities Fund dividend

The Board of PM Capital Global Opportunities Fund decided to declare an interim dividend of 2 cents per share, which was an increase of 11% compared to the previous 1.8 cents per share dividend.

Is the PM Capital Global Opportunities Fund share price a buy?

The LIC now has a grossed-up dividend yield of 4.5%. It’s trading at a 15% discount to the disclosed pre-tax NTA at 7 February 2020.

If you believe that the shares that the LIC owns are also at a good value and the fund manager is a good manager, then you’re getting a good double discount. I’d be happy to buy more shares at today’s price, I already own a small position.

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Motley Fool contributor Tristan Harrison owns shares of PM Capital Global Opportunities Fund Ltd. 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.