When I am considering buying an ASX stock, one of the first metrics I look at is that stock's dividend growth history. This history alone can tell us a lot about a company's financial health, its resilience, and its potential as a profitable, long-term investment.
Although investors love dividends, paying them places an enormous burden on a company. Dividends are not free money. They are cash payments funded from a company's profits. Every dollar that goes out the door as a dividend is lost to that company forever. It cannot be used to pay taxes, reduce debt, or be reinvested in the business for future growth.
Many companies manage to afford to pay regular dividends to their investors. But only the best have the financial capacity to deliver regular dividend increases above the rate of inflation. If you find a company that can do this consistently, it has a high chance of being a long-term winner and market-beating investment. At least in my opinion.
When it comes to divided growth streaks, there are few ASX shares that can match MFF Capital Investments Ltd (ASX: MFF).
MFF Capital is a listed investment company (LIC) that specialises in investing in US stocks. Like most LICs, MFF holds a portfolio of underlying investments that it manages on behalf of its shareholders. MFF typically follows a Warren Buffett playbook of buying high-quality companies at attractive prices and holding them. Some of its most successful positions have been in its portfolio for years, and include Amazon, Google-owner Alphabet, Mastercard, Home Depot, American Express, and Visa.
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This ASX stock is a dividend growth machine
But let's talk about this ASX stock's dividend growth. MFF happens to have one of the sharpest dividend growth trajectories on the ASX. To illustrate, MFF shares paid out 2 cents per share in fully-franked dividends back in 2017. By 2021, that annual total had grown to 7.5 cents per share. By 2025, it had reached 17 cents per share.
Recently, MFF has confirmed that investors will receive an interim dividend worth 10 cents per share, fully franked, in May. Just this week, the company told shareholders to expect a final dividend of 11 cents per share later this year. This, if all goes to plan, would see MFF's 2026 dividend total come in at 21 cents per share.
That would be a 23.5% rise over 2025's dividends in one go. It would also mean that investors have enjoyed a compounded annual growth rate (CAGR) in dividend payments of 26.4% over the past five years. Since 2017, the CAGR has been 29.86%. In contrast, Commonwealth Bank of Australia (ASX: CBA) paid out $4.29 in dividends per share in 2017, and $4.85 per share in 2025. And that didn't include a dividend hike every year in between.
MFF Capital has one of the best dividend growth streaks on the ASX. Certainly, one of the steepest. That's why I'm confident this ASX stock will continue to be a winner going forward.
At the time of writing, MFF shares are trading on a trailing dividend yield of 4.15%.
