The ASX dividend share MFF Capital Investments Ltd (ASX: MFF) is one of my larger holdings, and I'm planning to buy more of it in the coming months.
Most of its activities are as a listed investment company (LIC) that targets international shares, but it also recently acquired a fund manager called Montaka, which gave it an operational element too.
I like this business for a number of reasons, which make it look like one of the most appealing ASX dividend shares to me in June. I'm planning to invest more in MFF shares this month and in the coming months.
Exposure to great businesses
MFF has outlined the types of companies and characteristics that the investment business looks for. In its March 2025 update, portfolio manager Chris Mackay said:
MFF's portfolio companies remain advantaged, and have achieved excellent returns on invested capital, year after year…Our portfolio companies are extremely profitable, and cash generative. They have sustainable advantages and strong prospects for above average profitable growth over the medium term. Their capacities to adapt to policy changes are well above average.
…Value (acquisitions at attractive prices) and Quality (compounding growth) underpin the medium to longer term analytical focus.
A quality portfolio means that MFF is never under pressure to act; patient accumulation and long-term retention of a portfolio of outstanding companies allows sensible opportunity cost comparisons over extended time periods (sales need not be followed immediately by replacement purchases, "rotations" typically distract and detract from quality and performance over the medium term). We need a share of only the small percentage of companies that sustain compound gains over time, as, for example, technology and competition disrupt advantages.
Some of its biggest positions include Alphabet, Amazon, MasterCard, Visa, Bank of America, American Express, Meta Platforms, Microsoft, and Home Depot. These are some of the strongest businesses in the world.
In my view, the way the portfolio is designed should help it deliver pleasing long-term returns.
Strong dividend credentials
An ASX dividend share needs to have good passive income credentials and MFF certainly ticks those boxes, in my opinion.
MFF has grown its annual dividend per share each year since 2018, and it seems well on its way to a decade of dividend increases.
It has provided guidance that it expects to pay an annual dividend per share of 16 cents in FY25. That currently translates into a grossed-up dividend yield of 5.2%, including franking credits.
The ASX dividend share is good value
MFF regularly tells investors about its underlying value, which is the value of its portfolio.
At the end of May, it had pre-tax net tangible assets (NTA) of $4.92 per share. That means the current MFF share price is trading at an 11% discount, which I think is very appealing.
Being able to buy such a great portfolio at a double-digit discount is a very appealing investment to me.
