The Australian Age Pension is one of the most generous in the world, and that's very appealing for retirees. However, I think the high-yield ASX dividend stock WCM Global Growth Ltd (ASX: WQG) is even more appealing.
WCM Global Growth is a listed investment company (LIC), though it's not among the most famous. There are more famous names, such as Australian Foundation Investment Co Ltd (ASX: AFI) and Argo Investments Ltd (ASX: ARG).
The LIC seeks to invest in high-quality global stocks with improving economic moats and positive corporate cultures.
There are several compelling reasons to prefer the LIC to the Age Pension.
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Rising dividends
I think one of the best reasons to like this LIC is how the high-yield ASX dividend stock is growing its payout at a significantly faster pace than inflation.
The business has provided guidance that it will keep hiking its quarterly dividend at a good pace over the next year.
It expects its June 2027 payment to be 13% higher than the June 2026 payment. The annual dividend per share has increased every year since 2019. Dividend growth is not guaranteed, but the future looks bright for payouts in the coming years.
Large dividend yield
The next year of dividends looks like it will be very rewarding for shareholders with a good dividend yield.
WCM Global Growth has guided that it will pay 9.59 cents per share over the next year, which translates into a grossed-up dividend yield of 6.5%, including franking credits, at the time of writing.
Plus, that's just the starting dividend yield. The yield could continue to improve as the business grows.
Capital growth
Another reason to like this high-yield ASX dividend stock is that it's delivering a rising share price for investors too. Of course, past performance is not a guarantee of future performance.
Not only is the business delivering excellent dividends, but its attractive returns are helping drive the WCM Global Growth share price higher with the retained investment money.
Since inception in June 2017, the LIC's portfolio has delivered an average return per year of 15.9%. In the past five years, the WCM Global share price has risen by around 30% (and it's up 70% in the past four years).
How many shares would it take to equal the Age Pension?
Currently, for single Australians, the maximum annualised Age Pension they can receive is approximately $31,200.
To receive that much over the next year would require 325,339 shares, not including the franking credits. If we include the franking credits, it would require 233,577 shares.
While I don't have anywhere near that much invested in the high-yield ASX dividend stock, I do have a sizeable position because I'm bullish about its future ability to deliver attractive returns and continue growing its dividend.
