Why is the AFIC (ASX:AFI) share price making news again?

AFI shares are back in the news after setting a new all-time high today.

| More on:
active person star jumping amid city landscape

Image source: Getty Images

The Australian Foundation Investment Co. Ltd (ASX: AFI) share price set a new all-time high today during a somewhat bumpy ride in the green.

At the market close, the AFIC share price was right back where it started at $8.42, a major step down from its intraday record high of $8.49.

Despite the flat end to today’s run, shares in the listed investment company have gained almost 8% in the last month alone.

Let’s examine the tailwinds behind the AFIC share price.

Net tangible asset growth

Back in early July, AFIC gave us an update on its core portfolio’s performance for the month of June.

As at 30 June, AFIC’s net tangible assets (NTA) per share grew to $7.45 per share, a sequential growth from $6.19 the month prior.

Much of the growth was underscored by strengths in large holdings like Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP) and Wesfarmers Ltd (ASX: WES) for instance.

The AFIC share price has climbed 14% since this announcement.

Return of the dividend

AFIC also announced it will resume its dividend in its preliminary quarterly earnings report. It detailed that it will return 14 cents per share back to its shareholders this payment.

The shares will go ex-dividend on 11 August and shareholders will enjoy the return of the dividend in their bank accounts on 31 August.

The announcement balanced sentiment on AFIC’s quarterly results, which saw revenue contract 0.6% year on year. In addition, AFIC saw net profits decrease by 2.2% to $235 million in the quarter.

This number was propped up by dividends received on the back of Endeavour Group Ltd (ASX: EDV)’s demerger from Woolworths Group Ltd (ASX: WOW) earlier in the year.

AFIC shares have climbed a further 4% since this announcement on 26 July.

AFIC share price snapshot

The AFIC share price has lifted 14.2% year to date, extending the previous 12 month’s return of almost 35%.

These returns have outpaced the S&P/ASX 200 Index (ASX: XJO)’s return of around 23% over the past year.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Wesfarmers Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson

More on Record Highs