There are not many ASX stocks that I like as much as MFF Capital Investments Ltd (ASX: MFF) for passive income. Its dividend record, the size of the dividend increases, and the diversification it provides, are all compelling reasons to consider the business.
I like the idea of owning a diversified portfolio of ASX stocks, but many of the available businesses have operations focused on Australia (and New Zealand). There's not much geographic diversification for the earnings.
MFF offers everything I'm looking for, which is why I've made it one of the largest passive income investments in my portfolio.
Let me explain further.
Excellent diversification
When we buy many ASX shares, we're buying a small slice of a single business.
MFF's main value is concentrated in a portfolio of global shares. One of MFF's main goals is medium-term compounding and seeking to avoid permanent capital losses.
Its portfolio includes a number of excellent businesses that have global earnings with incredible economic moats such as MasterCard, Alphabet, Visa, American Express, Meta Platforms, Amazon, Home Depot and Microsoft.
MFF's portfolio has a strong track record of performance. Winners have a habit of winning over the long-term, particularly if they continue investing in their products/services.
I'm excited by the long-term potential of MFF's portfolio and how this can drive the overall shareholder returns for investors.
MFF's ability to generate investment returns plays a big part in the attractiveness of its passive income.
Passive income of $1,000 per year
Pleasingly, the business has a very good record of paying dividends to investors. It has increased its regular annual dividend each year between 2017 and 2025. Not many large ASX stocks can say that.
MFF's other main goal is to increase its fully franked dividend over time and I'm confident the business will increase its payout in FY26.
The ASX stock has a strong track record of growing its payout at a strong rate over the last several years. In FY25 alone, the business decided to increase its annual dividend by just over 30% to 17 cents per share.
But, for my calculation of receiving $1,000 of passive income, I'm going to use the payout figure from FY25.
To receive $1,000 of annual cash passive income with the 17 cents per share, we'd need 5,883 MFF shares. But, if we include the franking credits as part of that income goal, we'd only need 4,118 shares.
The ASX stock still trades at decent value
Is this a good time to invest? The business regularly tells investors about its underlying value regularly.
At 9 January 2026, it had approximately $5.40 of pre-tax net tangible assets (NTA). At the time of writing, it's trading at an attractive single-digit discount to this valuation. I like being able to buy shares for less than they're worth.
