ASX stocks that offer investors the prospect of both growth and income are a rare breed on the ASX. I think MFF Capital Investments Ltd (ASX: MFF) is one such share though.
MFF Capital is a listed investment company (LIC) that has been on the ASX for almost two decades. Despite a lack of publicity and fanfare, it has produced some exciting returns for investors ever since its listing.
Today, its sharers are looking compelling. MFF currently sports a trailing dividend yield of 4.09% (as of yesterday's closing price). So let's discuss whether this ASX stock is the best growth and income play on the ASX.
Like most LICs, MFF owns and manages an underlying portfolio of investments. In this case, that underlying portfolio consists mostly of US stocks, with some other international companies thrown in. MFF has always followed a Warren Buffett-insprired approach to investing. Its holdings tend to be mature, dominant companies that display signs of possessing a moat, or intrinsic competitive advantage that helps it stay ahead of competition. These companies are purchased at compelling prices, and held indefinitely for the benefit of MFF shareholders.
Some of MFF's largest positions have been in its portfolio for many years. They include the likes of Amazon, Mastercard, Alphabet, Visa, American Express, and Microsoft.
This strategy has paid off for MFF's long-term investors. By my calculations, investors have enjoyed an average total return (share price growth plus dividends) of about 12.1% per annum over the past ten years, and 15.05% per annum over the past five. On the latter metric, investors have received an average share price growth rate of 11.7% per annum.
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Growth and income from this top ASX stock?
So we know MFF offers plenty of growth potential. But what about income?
Well, MFF has that in spades too, and is more potent that even its starting 4%-plus yield would indicate. As I've discussed before, MFF is one of the ASX's best dividend growth stocks. To prove it, let's go back through this ASX stock's recent dividend history. Back in 2017, MFF paid out 2 cents per share in fully-franked dividends to its shareholders. By 2021, the company was up to forking out 7.5 cents per share. Last year, it had hit 17 cents per share.
In 2026, the company has told investors to expect a total of 21 cents per share, up 23.5% from just 2025 levels if so. The trajectory of 2 cents per share to 21 cents per share in 2026 would come to an compounded annual growth rate of 26.4% per annum.
If this blistering dividend growth rate continues, it will be exceptionally lucrative for long-term investors.
All in all, I regard MFF Capital as one of the ASX's best performers in recent years, and a stellar investment, period. I am happy to hold it in my own portfolio, and equally happy to recommend it to any investor who is searching for growth and income today.
