I love an ASX dividend stock whose payout history resembles a smooth staircase. There aren't many shares on the ASX that can offer up this pretty picture.
Sure, many of the income favourites on our market have decent dividend histories. But BHP Group Ltd (ASX: BHP)'s payouts, although often hefty, are hardly consistent. And the big banks tend to turn off the taps pretty quickly when the economy looks shaky. 2020 and 2021 are prime examples.
But MFF Capital Investments Ltd (ASX: MFF). Now that's a staircase.
MFF Capital is a listed investment company (LIC). That means it is a company that doesn't produce goods or services itself. Instead, it owns and manages an underlying portfolio of investments on behalf of its shareholders.
In MFF's case, this portfolio consists mostly of US stocks. These are selected and bought using the value investing principles that Warren Buffett originally championed. Portfolio manager Chris Mackay is a Buffett acolyte and loves buying high-quality companies at prices that make sense and holding them indefinitely.
Many of MFF's top holdings have been in its portfolio for years. They include Amazon, Mastercard, Alphabet, American Express, Home Depot, Visa, and Meta Platforms.
MFF uses the profits and dividends that it receives from these holdings to fund its own payouts.
Image source: Getty Images
One of the ASX's best dividend growth stocks?
The growth in said payouts has been extraordinary. MFF has gone from paying 1 cent per share in each semi-annual dividend back in 2017 to its latest half-year payout worth 10 cents per share. That payout, as with every dividend from this company, came with full franking credits attached.
This growth has been even more pronounced in recent years. Back in 2021, MFF doled out a total of 6.5 cents per share in fully-franked dividends. 2022 saw that upped to 7.5 cents per share, which grew again to 9.5 cents the following year. 2024 saw MFF dole out 13 cents per share in dividends, with 2025 seeing 17 cents per share distributed to investors.
In 2026, the company will hit an annual total of 21 cents per share if its guidance is to be believed. That's a compounded annual average growth rate of 26.5% over five years. Incredible stuff, and a beautiful staircase to appreciate.
No dividend share is perfect, and none can offer a guaranteed stream of income. However, as I discussed earlier this week, a company's dividend history is one of the crucial factors I use to decide if a company is worthy of investment. MFF passes this test easily, and with flying colours. That's why it's a core holding of my portfolio, and an ASX dividend stock I would recommend to any investor today.
