3.4% dividend yield! I'm buying this ASX stock and holding for decades

There are a few things I look for in an ASX stock when I'm looking for my next investment. One …

Key points
  • MFF Capital Investments is an ASX-listed investment company that focuses on American stocks and follows Warren Buffett's investing style, identifying dominant companies with wide moats.
  • The company has shown impressive growth, expanding its portfolio from $412 million in 2013 to $2.4 billion by June 2025, and it has a strong history of dividend growth, increasing payouts from 2 cents per share in 2016 to 17 cents in 2025.
  • Currently offering a 3.4% dividend yield, MFF is poised for continued success, with expectations to further raise dividends, making it an appealing long-term investment choice.

There are a few things I look for in an ASX stock when I'm looking for my next investment. One of the first checkboxes on my list is 'Do I believe this company will be larger and more successful in ten years' time than it is today?'

The second is a long track record of delivering meaningful returns, hopefully ones that beat the broader market.

I think MFF Capital Investments Ltd (ASX: MFF) ticks both with flying colours. That's why I've been buying this ASX stock with the expectation of holding it for the next decade, and hopefully the one after that.

MFF is a listed investment company (LIC). This means that instead of producing goods or services that customers purchase, it functions as an investor itself, holding a vast portfolio of underlying investments. These are owned by the company and managed on behalf of all shareholders. 

In MFF's case, this underlying portfolio consists mostly of American stocks. Not just any stocks, though. MFF's management team are unabashed fans of Warren Buffett's investing style. Portfolio manager Chris Mackay, one of the co-founders of Magellan Financial Group Ltd (ASX: MFG), likes to identify dominant companies with wide moats, buy them at compelling prices, and hold them indefinitely.

Many of MFF's largest portfolio holdings have been there for many years. These include Home Depot, Amazon, Alphabet, American Express, Mastercard, Visa, and Bank of America. MFF has identified these companies as outstanding compounders of capital, and intends to hold them as long as they continue to fulfil that role. 

But let's talk about dividends.

A businessman in a suit wears a medal around his neck and raises a fist in victory surrounded by two other businessmen in suits facing the other direction to him.

Image source: Getty Images

A 3.4% ASX dividend stock to hold for decades

MFF has been around in some form or another since 2006. Since fully separating from Magellan in 2013, the company has grown its portfolio from approximately $412 million to $2.4 billion as of 30 June 2025. 

MFF Capital has been paying biannual dividends since 2012. However, it has accelerated its growth in recent years to become one of the ASX's most formidable dividend-growth stocks.

In 2016, MFF investors received 2 cents per share in annual dividends. But every year since, the company has jacked up its payouts. By 2020, it was paying out an annual total of 6 cents per share, and by 2025, 17 cents per share. Those consisted of an interim dividend worth 8 cents per share and a final dividend of 9 cents per share. Both payments came fully franked, as is MFF's custom. That's an annual compounded growth rate of over 30% since 2016.

The LIC has already flagged that investors can expect an interim dividend of 10 cents per share in 2026.

I've owned MFF Capital shares for years now, and my only regret is not buying more. I'll be happy to add more of this ASX stock to my holdings soon.

At the current share price, MFF Capital is trading on a dividend yield of 3.4%.

Bank of America is an advertising partner of Motley Fool Money. American Express is an advertising partner of Motley Fool Money. Motley Fool contributor Sebastian Bowen has positions in Alphabet, Amazon, American Express, Mastercard, Mff Capital Investments, and Visa. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Home Depot, Mastercard, and Visa. The Motley Fool Australia has recommended Alphabet, Amazon, Mastercard, Mff Capital Investments, and Visa. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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