There are a few names in my portfolio I've significantly invested in for passive income and long-term growth. One of those is MFF Capital Investments Ltd (ASX: MFF), a listed investment company (LIC) that offers numerous positives as a reliable ASX dividend stock.
It's led by Chris Mackay, with the investment team growing in recent years to add significant capabilities to the business.
The LIC is approximately $3 billion in size, and I believe it has a very positive future ahead for multiple reasons.
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Diversification
The ASX dividend stock's investment strategy is to invest in high-quality opportunities. Its portfolio is mostly global shares, though it does own a couple of ASX-listed investments too.
I think it's wise to look across the entire global share market for opportunities because there are so many more opportunities outside of Australia compared to on the ASX.
MFF aims to invest in businesses with enduring competitive advantages and good prospects for profit growth. Some of its largest positions include Alphabet, Amazon, Mastercard, Visa, Bank of America, Meta Platforms, American Express and Microsoft.
As you can see, these are the types of businesses that have compelling long-term compounding profit potential, which can help drive shareholder returns over the long-term.
Over the last 10 years, it has delivered an average total shareholder return (TSR) of 14% per year, which is a good measure of its performance. Portfolio performance of that level is enough to deliver both capital growth and good long-term dividends.
Reliable ASX dividend stock
MFF has increased its regular annual dividend every year since 2018, so it already has a good record of dividend increases.
The business has provided guidance that it's going to hike its FY26 annual dividend per share by 23% to 21 cents. That follows on from the FY25 annual dividend being hiked by more than 30%.
The FY26 payout means the business could pay a grossed-up dividend yield of approximately 6%, including franking credits.
MFF says that it has a focus on growing dividends over time. It has significant franking credits and profit reserves to continue paying large dividends to shareholders.
I think the business has a great shot at continuing to grow its annual dividend per share at a strong pace. I wouldn't be surprised to see the business hike its payout to 25 cents per share in FY27, which would translate into a grossed-up dividend yield of approximately 7.1%, including franking credits, at the time of writing.
How much could $1,000 buy?
If an investor were to put $1,000 into MFF shares, they'd be able to buy 198 MFF shares.
I'd be very happy to invest in the ASX dividend stock for the long term.
