AFIC is the largest and one of the oldest listed investment companies (LICs) in Australia. It aims to provide shareholders with attractive investment returns through access to a growing stream of fully-franked dividends and enhancement of capital invested over the medium to long term.

It owns a mix of ASX dividend shares and ASX growth shares to provide an appealing portfolio of investments that delivers long-term returns.

The large LIC recently gave an investor presentation discussing the ASX shares it has bought.

Interestingly, the business also reported which companies it has been selling. Those sales include National Australia Bank Ltd (ASX: NAB), Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), ALS Ltd (ASX: ALQ), Sonic Healthcare Ltd (ASX: SHL), and Telix Pharmaceuticals Ltd (ASX: TLX).

ASX 200 dividend share buys

There were four names that AFIC highlighted that it had bought, which it classified as income picks.

First, there's electronics and home appliance retailer JB Hi-Fi Ltd (ASX: JBH), which operates JB Hi-Fi Australia, JB Hi-Fi New Zealand, The Good Guys, and E&S.

Next, there was supermarket business Coles Group Ltd (ASX: COL).

Third, AFIC highlighted the portfolio had invested in the share registry (and other services) company Computershare Ltd (ASX: CPU).

The last ASX dividend share that was highlighted was major telco Telstra Group Ltd (ASX: TLS).

ASX 200 growth share buys

While AFIC highlighted four income names for the portfolio, there were six ASX growth shares, all of which you could describe as being in the tech space.

AFIC invested in the car online marketplace business CAR Group Ltd (ASX: CAR) (which owns Carsales).

Another investment was Pro Medicus Ltd (ASX: PME), a leading provider of medical imaging software and services to clients like hospitals, imaging centres, and healthcare groups.

The next highlighted choice was Netwealth Group Ltd (ASX: NWL), a financial technology business providing a platform and giving clients increased access to investment options.

Another pick was TechnologyOne Ltd (ASX: TNE), a global provider of enterprise resource planning (ERP) software.

After that, AFIC noted SEEK Ltd (ASX: SEK), the global jobs portfolio business, was another recent investment.

The final ASX 200 share investment that AFIC highlighted was REA Group Ltd (ASX: REA), the owner of realestate.com.au and several other real estate-related businesses.

Overall, I think AFIC has made some brave, smart ASX share moves that I think will play out positively.

The post A leading investor just bought these ASX 200 shares for income and growth appeared first on The Motley Fool Australia.

But, given how share prices have drifted lower this year, I'm seeing a great opportunity for investors to grab ASX shares while dividend yields are higher.

Don't forget, we saw a few years ago how some businesses were able to accelerate their revenue growth amid the inflationary period – they were not just helpless bystanders in the situation.

Why do interest rates matter for ASX shares?

Interest rates play an important role in how much investors are willing to pay for an asset. It acts like gravity – when interest rates go lower, asset prices can jump higher. But, the opposite is typically true when interest rates go up – it's a significant headwind for asset valuations.

But, share prices can still go up in a rising rate environment if the operating profit/net profit of the business or asset increases. The multiple of earnings that investors are willing to pay is just one part of the equation.

Warren Buffett, the legendary American investor from Omaha, once explained why interest rates are so important for valuations. Buffett said:

The value of every business, the value of a farm, the value of an apartment house, the value of any economic asset, is 100% sensitive to interest rates because all you are doing in investing is transferring some money to somebody now in exchange for what you expect the stream of money to be, to come in over a period of time, and the higher interest rates are the less that present value is going to be. So every business by its nature…its intrinsic valuation is 100% sensitive to interest rates.

Investor expectations of rate rises this year has led to lower share prices for some businesses, along with the oil price volatility.

How does it affect the passive income?

When the share price of an ASX dividend share falls, it can lead to a double whammy of a better valuation and a better dividend yield.

A dividend yield is determined by the size of the payout and the valuation of the business. When share prices go lower, the dividend yield increases.

For example, if a business had a dividend yield of 5% and the share price falls 10%, the dividend yield becomes 5.5%. If it fell 20%, the dividend yield would be 6%.

I like investing at times like these, as it really boosts the potential dividend yield.

Is it a once-in-a-decade opportunity to buy passive income shares? The 2020s have already seen COVID-19, the inflation and tariff related sell-offs, so the declines have been more than once-in-a-decade.

But, this is certainly a rare opportunity to buy ASX dividend shares with a good dividend yield.

What I'd invest in

There are a wide range of ASX dividend shares that are trading at attractive prices with a good dividend yield.

I'm thinking names like Charter Hall Long WALE REIT (ASX: CLW), Centuria Industrial REIT (ASX: CIP), Medibank Private Ltd (ASX: MPL), Telstra Group Ltd (ASX: TLS), Wesfarmers Ltd (ASX: WES), Coles Group Ltd (ASX: COL), Australian Foundation Investment Co Ltd (ASX: AFI), WCM Global Growth Ltd (ASX: WQG), JB Hi-Fi Ltd (ASX: JBH), Universal Store Holdings Ltd (ASX: UNI), Nick Scali Ltd (ASX: NCK) and Lovisa Holdings Ltd (ASX: LOV).

I'm optimistic that the above names can provide investors with a diversified and growing source of passive income over time.

The post A once-in-a-decade chance to earn a supersized passive income from ASX shares? appeared first on The Motley Fool Australia.

What did Australian Foundation Investment Company report?

• Mark Freeman to retire as CEO and Managing Director at end of FY26 after over 31 years with AFIC and related LICs
• Alison Gibson appointed incoming Managing Director and CEO, effective 13 July 2026
• Gibson brings over 25 years' experience in investment management, including a decade at AFIC
• AFIC's funds under management have grown from $1 billion to $12 billion under Freeman's leadership
• More than 200,000 shareholders currently invest in AFIC and related listed investment companies

What else do investors need to know?

Alison Gibson will take charge not only at AFIC but also as CEO and Managing Director of Australian Investment Company Services Limited (AICS). This group provides investment and administration services to AFIC and three other listed investment companies: Djerriwarrh Investments, Mirrabooka Investments, and AMCIL Limited.

Gibson previously served as portfolio manager at AFIC from 2011 to 2021 before joining HESTA. She has a strong background in portfolio management, equity research, and investment strategy, leading investment teams in both institutional and funds management settings.

Her employment package includes a base salary of $850,000 per annum plus a potential annual incentive of up to 100% of her fixed remuneration, along with standard notice and post-employment restrictions.

What's next for Australian Foundation Investment Company?

With Freeman's retirement planned for the end of FY26, the leadership transition will take place over the coming year. Alison Gibson is expected to build on AFIC's established investment approach, supported by her experience and familiarity with the business.

The Board has highlighted its confidence in Gibson's ability to lead AFIC and its affiliates, continuing their focus on long-term value for shareholders at low cost.

Australian Foundation Investment Company share price snapshot

Over the past 12 month, AFIC shares have declined 7%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 5% over the same period.

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The post AFIC announces CEO transition: Alison Gibson to succeed Mark Freeman in 2026 appeared first on The Motley Fool Australia.

ASX stocks can provide both capital growth and dividends (passive income). That sounds good to me!

If someone were to start investing at the age of 25, they could grow their wealth enormously by the time they wanted to retire.

Time will tell what the usual retirement age will be in 40 or so years. It could be 65, 70 or even older. But, I'm going to show how a 25-year-old investor could grow their wealth over the next four decades.

Compounding potential

Every household's finances are different, so I can't say for sure what level of savings someone would be able to unlock for investing. What I do know, is that we want to get to a place where we are spending less than our income so we have money left over to invest.

When we're able to create savings most months (or every month), then we can put that money towards investing into the ASX stock market.

Investing in shares is simple, comes with a lot less paperwork and costs than property, doesn't require debt and can deliver great returns in we invest in the right area.

Over the ultra-long-term, shares have returned an average of around 10%. At that rate, the value of the shares would double in just eight years.

Let's imagine a 25-year-old was able to invest $1,250 each month on average into ASX stocks. That would become $6.64 million after 40 years, with around $6 million of that being generated by returns and the rest being from the monthly deposits.

I'm not sure what portfolio size will be needed to reach a comfortable retirement, but $6 million may be more than enough.

Someone may not want to work as long as that.

After 30 years of following that strategy, the portfolio would be worth $2.47 million.

After 20 years it'd be worth $859,000, which may not quite be enough.

Therefore, it could take less than 30 years for someone to build a substantial wealth fund.

Which ASX stocks to invest in?

The easiest way to invest could be exchange-traded funds (ETFs) that provide diversified exposure to the share market such as BetaShares Australia 200 ETF (ASX: A200) and Vanguard MSCI Index International Shares ETF (ASX: VGS).

Listed investment companies (LIC) such as Australian Foundation Investment Co Ltd (ASX: AFI), WAM Microcap Ltd (ASX: WMI) and L1 Long Short Fund Ltd (ASX: LSF) could be compelling options.

Or, some of country's best ASX growth shares such as Temple & Webster Group Ltd (ASX: TPW), Tuas Ltd (ASX: TUA) or TechnologyOne Ltd (ASX: TNE) could be compelling picks.

The post If a 25-year-old invests $1,250 a month in ASX stocks, here's what they could have by retirement appeared first on The Motley Fool Australia.

For example, AFIC decided to trim its Commonwealth Bank of Australia (ASX: CBA) and Wesfarmers Ltd (ASX: WES) share positions on valuation grounds. It hopes to invest in those names if they come down to a more appealing price, according to AFIC.

There were a few ASX 200 shares that AFIC invested. It said its buying was concentrated in two blue-chip companies where it sees an attractive dividend yield combined with high-quality and attractive valuation. Let's take a look at what AFIC liked about them.

Telstra Group Ltd (ASX: TLS)

AFIC said that Telstra shares remains the dominant leader in an attractive industry that continues to be driven by a growing population's increasing usage of data.

The investment team believe ASX 200 telco share returns are improving and the balance sheet is in good shape, which should result in a high fully franked dividend yield that AFIC believes can grow over time.

Woolworths Group Ltd (ASX: WOW)

The ASX supermarket share has gone through a rough time as it underperformed Coles Group Ltd (ASX: COL) shares.

AFIC noted that Woolworths has recently delivered some "disappointing" financial results because of poor execution in its core supermarkets business.

The LIC believes the ASX 200 share's issues are temporary and this has given AFIC the opportunity to invest in a high returning, defensive business that provides its portfolio with a "good mix of fully franked dividend income plus growth".

Sigma Healthcare Ltd (ASX: SIG)

AFIC also revealed that it continues to build its investment in Sigma Healthcare shares in a patient and disciplined manner by taking advantage of some recent short-term underperformance in the share price. The below chart shows how the ASX healthcare share has been volatile recently.

Following the merger with Chemist Warehouse, Sigma Healthcare is now Australia's leading retail pharmacy franchisor, distributor and wholesaler.

AFIC thinks the ASX 200 share has a strong track record of execution with double-digit revenue growth over the past two decades.

The ASX healthcare share continues to have a long growth runway, according to the LIC, as it operates in an attractive, strongly growing healthcare and beauty retail category in which it is winning market share. AFIC said Sigma Healthcare primarily offers its portfolio an attractive level of capital growth alongside modest, albeit strongly growing, dividends.

The post 3 ASX 200 shares this fund manager says are buys for 2026 appeared first on The Motley Fool Australia.

What did Australian Foundation Investment Company report?

• Profit after tax: $147.0 million, down 4.6% from $154.2 million last year
• Revenue from operating activities: $168.7 million, down 2.8%
• Investment income: $160.6 million, compared to $166.3 million in the prior period
• Interim dividend: 12.0 cents per share, fully franked, unchanged from last year
• Special dividend: 2.5 cents per share, fully franked
• Portfolio return for 6 months: negative 2.0% (including franking)

What else do investors need to know?

The board has announced both an interim and a special dividend for shareholders, using a solid franking credit balance built up over recent years. While overall dividend income fell—mostly due to smaller payouts from companies like BHP, Woodside and Woolworths—certain blue-chip holdings such as ARB and Wesfarmers paid special dividends during the half.

AFIC adjusted its portfolio by trimming positions in overvalued holdings like Wesfarmers and Commonwealth Bank and added to Telstra, Woolworths, and Sigma Healthcare. The portfolio return lagged the S&P/ASX 200 Accumulation Index, reflecting underperformance from some of its larger holdings and less exposure to strongly performing small and mid-cap resource stocks.

What's next for Australian Foundation Investment Company?

Looking ahead, the company intends to maintain its approach of investing in high-quality businesses to deliver consistent returns and dividends. Management remains cautious due to elevated market valuations and ongoing economic uncertainty but continues to look for opportunities in undervalued sectors and quality companies.

The board is also aiming to pay another fully franked special dividend with the full-year result in July. Directors plan to revisit capital management strategies, considering franking credit balances and market conditions.

Australian Foundation Investment Company share price snapshot

Over the past 12 months, the Australian Foundation Investment Company shares have declined 6%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 5% over the same period.

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The post Australian Foundation Investment Company shares: Half-year profit slips, dividends held steady appeared first on The Motley Fool Australia.

Stability is a valuable thing during times of uncertainty. The three businesses I'm going to highlight look like good buys right now, including where their valuations are today.

Let's get into it.

Transurban Group (ASX: TCL)

Transurban is Australia's largest toll road operator, with roads in Melbourne, Sydney, Brisbane, and North America.

As the chart below shows, the Transurban share price has been drifting lower since November 2025, but this could prove to be an appealing entry point for the business, considering it's still seeing traffic growth.

If the business continues seeing traffic growth and inflation of toll prices over time, then its operating profit (EBITDA) and cash flow can continue rising.

The quarterly update for the three months to September 2025 saw the ASX blue-chip share's annual daily traffic (ADT) increase 2.7% year over year, with Sydney ADT up 1.7%, Melbourne ADT up 3.2%, Brisbane ADT up 2.6%, and North American ADT up 6.8%.

With the business continuing to invest in new projects, ADT can rise further. The future looks bright for the business.

It's expecting to pay an annual distribution per security of 69 cents, which represents an increase of 6% year over year. At the time of writing, this translates into a forward distribution yield of 5%.

Australian Foundation Investment Co Ltd (ASX: AFI)

I don't think of AFIC, Australia's largest listed investment company (LIC), as a single business but as a portfolio of names.

It's invested in many ASX blue-chip shares, offering solid diversification.

Its portfolio gives exposure to names like Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), Wesfarmers Ltd (ASX: WES), and Macquarie Group Ltd (ASX: MQG).

I like how the portfolio has been constructed to offer both long-term capital growth and dividends for shareholders.

The fact that the ASX blue-chip share is (likely) trading today approximately 10% below its net tangible assets (NTA) is appealing to bargain hunters.

Coles Group Ltd (ASX: COL)

The supermarket and liquor business (it owns liquor retailers like Coles Liquor and Liquorland) isn't a high-flying stock, but it's clearly doing very well against peers.

Its supermarket business saw 7% sales growth excluding tobacco in the first quarter of FY26, which I'd describe as a strong performance, as its exclusive products, own-brand items, and value attract customers.

An ASX blue-chip share with defensive characteristics doesn't need to deliver huge earnings growth to outperform the market. Compounding is a powerful force; it's not just for the fastest-growing businesses.

As its supermarket network grows, offering more products and services and improving its supply chain, the company's profits can continue to rise.

At the time of writing, it's down by more than 10% since September, making this a better time to buy.

The post 3 ASX blue-chip shares I'd buy with $10,000 right now appeared first on The Motley Fool Australia.

If you haven't heard of AFIC before, it's a listed investment company (LIC) that largely targets ASX shares for its portfolio.

Its goal is to provide shareholders with attractive investment returns through access to a growing stream of fully-franked dividends, as well as growing the capital value over the medium to long term.

This is not meant to be a short-term investment – AFIC believes the suggested investment period is five to 10 years.

Let's get into why AFIC shares are an appealing pick for retirees.

Diversification

The LIC can offer investors exposure to a portfolio of businesses, with a weighting towards large businesses. Its top 25 holdings account for 79.5% of the portfolio.

While these companies may not be small, rapidly growing businesses, they can provide stability and strength.

AFIC has been operating for almost a century and has built up a large position in many of Australia's blue-chip stocks. Its total portfolio value is worth around $10 billion, and its blue-chip positions, worth at least 3% of the portfolio at the end of December, include:

• BHP Group Ltd (ASX: BHP) – 9.6% of the portfolio
• Commonwealth Bank of Australia (ASX: CBA) – 8.4%
• National Australia Bank Ltd (ASX: NAB) – 5.1%
• Westpac Banking Corp (ASX: WBC) – 5%
• CSL Ltd (ASX: CSL) – 4.8%
• Macquarie Group Ltd (ASX: MQG) – 4.5%
• Wesfarmers Ltd (ASX: WES) – 4%
• Transurban Group (ASX: TCL) – 3.8%
• Goodman Group (ASX: GMG) – 3.6%
• Telstra Group Ltd (ASX: TLS) – 3.5%

The overall AFIC portfolio is more diversified than the S&P/ASX 300 Index (ASX: XKO) in terms of the spread of sector allocation. There are four sectors that have a double-digit weighting – ASX bank shares (21.1%), ASX mining shares (15.2%), ASX industrials shares (12.3%), and ASX healthcare shares (11.3%).

I'd imagine plenty of retirees have all of their money in just one or a few properties, which isn't very diversified at all. Adding AFIC shares could be very helpful for diversification.

Reliable income

In retirement, I'd like to have a reliable source of dividend cash flow hitting my bank account.

While dividends aren't guaranteed, I think AFIC shares can provide a pleasing source of passive income. There hasn't been one payout cut this century from AFIC, making it one of the most reliable ASX dividend shares around.

The business increased its regular annual payout from 26 cents per share in FY24 to 26.5 cents per share in FY25. That translates into a grossed-up dividend yield of 5.3%, including franking credits.

There are a few businesses on the ASX that have been as reliable as AFIC over the last 25 years, which I think is reassuring for Australian retirees.

A cheap price

I like being able to buy assets for cheaper than they're worth.

Every week, AFIC tells investors how much the business is worth on a per-share basis with the net tangible assets (NTA) figure.

It had a pre-tax NTA per share of $7.89 as of 9 January 2026, which means it's trading at a discount of close to 10%, which I'd call a great bargain right now compared to many other potential investments.

This looks like a good time to invest in AFIC shares, in my view.

The post Why AFIC shares are a retiree's dream appeared first on The Motley Fool Australia.

That doesn't necessarily mean they're going to increase their payouts every single year, but I think each of the names I'm going to highlight can grow their payout in FY26 and the longer-term.

If I had $3,000 to invest, I'd happily put $1,000 into each of the following names.

Centuria Industrial REIT (ASX: CIP)

This business is a real estate investment trust (REIT) which owns a portfolio of appealing industrial properties across Australia. These buildings are located in compelling metropolitan areas where the vacancy rate is very low.

There are strong tailwinds for industrial property demand including ongoing e-commerce adoption and data centres, as well as population growth.

The REIT's fund manager Grant Nichols recently said:

CIP continues to achieve strong outcomes across its portfolio relating to leasing, capital transactions and value add initiatives. The ability to deliver these results is credited to CIP's portfolio being concentrated in Australia's urban infill markets where tenant demand is strongest, vacancy is low and supply is constrained. These urban infill assets provides multiple future opportunities for alternative, higher-use developments such as data centres and residential schemes.

I think this bodes well for future rental income growth in the coming years.

The ASX dividend share expects to pay a distribution per unit of 16.8 cents in FY26, which translates into a distribution yield of 5% at the time of writing.

Coles Group Ltd (ASX: COL)

The supermarket business offers a defensive set of earnings considering the essential nature of what it sells. Currently, the company is delivering strong sales growth in the mid-single-digits (and higher single digit sales growth excluding tobacco sales), outperforming Woolworths Group Ltd (ASX: WOW).

Pleasingly for income-focused investors, the business has increased its payout each year in the last six months.

According to the projection on Commsec, Coles is forecast to pay an annual dividend per share of 78.8 in FY26. That's a potential grossed-up dividend yield of 5.2%, including franking credits.

With a rising population, an expanding network of supermarkets, new advanced warehouses and an expanding range of own brand products, Coles shares look like a good long-term investment.

Australian Foundation Investment Co Ltd (ASX: AFI)

AFIC is a listed investment company (LIC). It's the biggest and one of the oldest around.

I like the diversification that this LIC can provide because of the dozens of businesses that it owns in the portfolio.

Some of its largest holdings include BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), CSL Ltd (ASX: CSL), Macquarie Group Ltd (ASX: MQG), Wesfarmers Ltd (ASX: WES) and Transurban Group (ASX: TCL).

Shareholders of this business haven't seen any ordinary dividend cuts this century – it has provided significant stability for income-focused investors.

The ASX dividend share is currently trading at a discount of around 10%, making it look to me like an appealing time to buy.

It has a trailing ordinary grossed-up dividend yield of 5.3%, including franking credits, at the time of writing.

The post 3 wonderful ASX dividend shares I'd buy with $3,000 right now appeared first on The Motley Fool Australia.

The listed investment company (LIC) Australian Foundation Investment Co Ltd (ASX: AFI) should be one of the businesses that income-focused investors look closely at because of multiple factors, in my opinion.

It offers much more than a solid dividend yield for investors, though that is a strong starting point. Let's get into why it's a good buy today.

Dividend yield

One of the first things that Australians may look at is how much passive income they're expecting from an investment.

Pleasingly, the business has maintained or grown its annual ordinary dividend every year this century. That's a pleasingly consistent level of passive income compared to many other stocks known for their dividends.

In FY25, the business slightly increased its annual payout to 26.5 cents per share, which translated into a grossed-up dividend yield of 5.3%, including franking credits.

Diversification

One of the reasons that AFIC is a compelling ASX dividend stalwart is because of the useful diversification it offers.

It's invested in a wide array of ASX shares from different sectors, giving the portfolio pleasing diversification.

Some of the LIC's larger holdings include BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), CSL Ltd (ASX: CSL), Macquarie Group Ltd (ASX: MQG), Wesfarmers Ltd (ASX: WES), Transurban Group (ASX: TCL), Goodman Group (ASX: GMG) and Telstra Group Ltd (ASX: TLS).

As time goes on, I think AFIC's portfolio is likely to become even more diversified.

I like that some of its portfolio is allocated towards more growth-focused businesses such as Resmed CDI (ASX: RMD), ARB Corporation Ltd (ASX: ARB) and REA Group Ltd (ASX: REA), helping drive returns and capital growth for AFIC over time.

Low fees

Some LICs have high levels of management fees, while AFIC is one of the LICs with the lowest fees. That means more of the portfolio returns stay in the hands of shareholders, rather than being lost to a fund manager.

The business currently has a low management cost of 0.16% and no additional fees.

Good value ASX dividend stalwart

There are a number of different ways to value a business – AFIC regularly tells investors about its net tangible assets (NTA) value, which is predominantly the share portfolio value and cash.

On 28 November 2025, the business had a pre-tax NTA of $7.91. The AFIC share price is trading at a discount of around 10% to its underlying value, which I think is a very appealing valuation and I think this makes it an appealing time to invest for the long-term.

The post An ASX dividend stalwart every Australian should consider buying appeared first on The Motley Fool Australia.

Just go back to the COVID-ravaged years of 2020 and 2021 to see this in action with many of the ASX's most prominent dividend payers.

But despite this, there are still a handful of ASX 200 shares that dividend investors can indeed set their watches to, or have decades-long streaks of not cutting their shareholder payouts anyway.

The Australian Foundation Investment Co Ltd (ASX: AFI) is one. AFIC is a listed investment company (LIC) that has been around for almost 100 years. Over the past three or four decades, it has built and maintained a reputation as one of the ASX's most reliable income payers. Indeed, it has been decades since its shareholders endured a dividend cut.

Every six months, a dividend payment that has either been held steady or raised has arrived in shareholders' bank accounts without fail. That includes during the COVID-induced ASX dividend drought, as well as the tumultuous years of the global financial crisis.

Like most LICs, AFIC owns and manages a portfolio of underlying investments on behalf of its investors. This portfolio consists mostly of blue chip ASX dividend stocks, with some international stocks thrown in.

You can set your watch to this 4.4% ASX dividend stock

Using prudent and conservative stewardship, AFIC's management team uses the stream of income received from these ASX dividend stocks to fund its own payouts.

The result has been that remarkable decades-long streak of uncut, uninterrupted shareholder payouts.

The most recent of these payouts was the August final dividend worth 14.5 cents per share. Before that, shareholders enjoyed the interim dividend from February worth 12 cents per share. The final dividend also came with a bonus special dividend worth 5 cents per share.

These 2025 dividends give AFIC shares a trailing dividend yield of 4.44% at yesterday's closing share price of $7.10. Now, we don't yet know what kind of ordinary payouts AFIC will dole out over 2026. Saying that, this ASX dividend stock's track record does bode well. However, AFIC has already told shareholders to expect two special dividends, each worth 2.5 cents per share, alongside the ordinary payments when they arrive in 2026.

You'd forgive shareholders for setting their watches for that today.

The post The 4.4% ASX dividend stock you can set your watch to appeared first on The Motley Fool Australia.

So today, let's talk about five ASX dividend stocks that I think would serve an income-focused portfolio well right now.

Five Australian dividend stocks to put under the tree this December

Coles Group Ltd (ASX: COL)

I've long thought of Coles as a winning Australian dividend stock. For one, it offers a defensive nature as a price-focused provider of food and household essentials. For another, it has a strong income track record, having delivered an annual dividend increase every year since 2018.

Coles shares did go on a big run this year, but have since pulled back. That's boosted this dividend stock's yield back over 3% at recent pricing. Coles shares have historically come with full franking credits attached too.

Australian Foundation Investment Co Ltd (ASX: AFI)

AFIC is a listed investment company (LIC) and Australian dividend stock that has been on the ASX for decades. Over this time, investors have come to appreciate this stock's conservative investing style, which AFIC uses to manage a vast underlying portfolio of Australian blue chips, complemented by some international shares.

AFIC already trades on an attractive (and fully franked) yield of around 3.7%, but has recently confirmed that investors will enjoy two special dividends over 2026.

Telstra Group Ltd (ASX: TLS)

I think Telstra offers income investors many of the desirable attributes that Coles does. The mobile and internet services that Telstra provides are essential in today's world, and Telstra has a long-held leading position in providing them across the Australian market.

This legendary Australian dividend stock has long been an income staple for good reason. Today, it offers a decent dividend yield of 3.88%, which has also always come fully franked.

MFF Capital Investments Ltd (ASX: MFF)

There aren't too many ways ASX investors can invest in US stocks and get a fully franked dividend. But this LIC is one of them. Like AFIC, MFF holds an underlying portfolio of shares that it manages on behalf of its investors. Unlike AFIC, though, MFF mostly invests in US stocks, following a Buffett-inspired playbook of buying quality companies at compelling prices and holding them indefinitely. Some of its long-term holdings include Amazon, Mastercard, Alphabet, and Visa.

Since MFF is domiciled in Australia, though, it pays tax here and thus has the capacity to fully frank its dividends. At present, this dividend stock is trading on a yield of about 3.5%.

Wesfarmers Ltd (ASX: WES)

Our final Australian dividend stock today is another income favourite in Wesfarmers. This company's strength arguably comes from its diversity. It is most famous for its highly successful retailers like Bunnings and Kmart. But Wesfarmers also owns a wide range of other businesses, spanning from healthcare and mineral processing to fertilisers and chemicals.

Wesfarmers has a stellar track record of delivering both growth and rising dividends for shareholders over many decades. Today, its shares trade with a fully franked yield of about 2.5%.

The post 5 best Australian dividend stocks to buy in December appeared first on The Motley Fool Australia.

As a listed investment company (LIC), AFIC owns and manages a portfolio of underlying investments on behalf of its shareholders. In this company's case, this portfolio mostly consists of a diversified pool of ASX blue-chip dividend shares. AFIC runs a much smaller international stock portfolio as well.

Some of its largest current portfolio holdings include BHP Group Ltd (ASX: BHP), National Australia Bank Ltd (ASX: NAB), CSL Ltd (ASX: CSL), and Macquarie Group Ltd (ASX: MQG).

Some of its international stocks include Netflix, Spotify, Mastercard, and Alphabet.

As this portfolio is entirely managed by AFIC's management, many investors enjoy being able to pass off the tough work of stock picking themselves to AFIC and simply keep its shares in the proverbial bottom drawer.

The company has a long track record of delivering reliable returns to its investors. AFIC has been around for almost 100 years, since 1928 to be precise. Over the ten years to 31 October, it has delivered a total shareholder return of 8.2% per annum. That figure includes share price growth as well as dividend and franking credit returns.

As we touched on above, AFIC shares have also proven to be a dependable source of passive dividend income. Shareholders haven't seen a year-to-year dividend cut in more than three decades.

Just this morning, AFIC gave its shareholders some good news on that front.

AFIC shares: Two special dividends for 2026 revealed

In an ASX announcement, the LIC revealed that AFIC shareholders can expect a special dividend to accompany the next two dividends that will be paid out. That would be the interim dividend that will be revealed on 21 January 2026, as well as the final dividend to be declared on 27 July. Both of these special dividends will be worth 2.5 cents per share and will come with full franking credits attached.

Obviously, we don't yet know how much the ordinary dividends that will come alongside these special payouts will be worth yet. Over 2025, AFIC's interim dividend came in at 12 cents per share, while the final dividend was worth 14.5 cents per share. The latter was also accompanied by a 5-cent per share special dividend. All three 2025 payments came fully franked.

Here's how the company explained the reasoning behind next year's special dividends:

The Board recognises that AFIC has built up a substantial balance of franking credits over recent years, particularly through the generation of realised capital gains. These franking credits are valuable to our shareholders, and the Board has considered the most appropriate means of distributing some of this balance without compromising the underlying ordinary dividends going forward.

No doubt owners of AFIC shares will welcome this news today. At the current price of $7.13, this LIC is trading on a trailing dividend yield of 3.72%.

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Unlike cash investments, such as term deposits, dividend-paying stocks can offer meaningful returns that exceed inflation and can increase over time without requiring additional investment.

Investing in any stock carries risks, of course. However, with the right stocks, I believe any Australian can enjoy a more comfortable retirement compared to if they were to rely solely on their cash savings and the Pension.

So today, let's talk about seven ASX income stocks that I think would serve a retiree, or pre-retiree, for decades to come.

Seven ASX dividend income stocks to supplement the pension

Coles Group Ltd (ASX: COL)

First up, we have a familiar name in Coles. What makes Coles a prudent long-term income investment for someone at or approaching retirement age is its defensive nature. We all need to eat and stock our households with life's essentials. As long as Coles offers these goods at convenient locations and affordable prices, its business should do well in all economic circumstances. Coles also pays a decent dividend, which has always come with full franking credits attached.

Telstra Group Ltd (ASX: TLS)

Telstra offers many of the attributes that make Coles a compelling retirement stock. Consider how indispensable internet connections and mobile phones are to our modern world. When we also consider that Telstra is the clear market leader in providing both of these services in Australia, its value becomes apparent. Telstra also offers stable dividend income that has always come fully franked.

Commonwealth Bank of Australia (ASX: CBA)

ASX banks are famous for their fat, and mostly fully franked, dividends, and CBA is no exception. CBA has been very expensive for a long time, but has recently come off the boil a little. Although still expensive, the current pricing on this income stock may provide a potentially decent entry point for long-term investors.

Transurban Group (ASX: TCL)

You may be familiar with Transurban as the large company that operates most of the major toll roads in the country. Whilst these tolls might be the bane of motorists, they are a highly reliable source of revenue for Transurban, which makes it a good candidate as an income stock for retirement. Although this stock's dividends don't offer much in the way of franking credits, it does usually have a high and stable yield on the table.

Wesfarmers Ltd (ASX: WES)

Wesfarmers is next up. This retail and industrial conglomerate has numerous underlying businesses, making it one of the most diversified ASX blue-chip companies. Its crown jewels are the retailers like Bunnings, OfficeWorks and Kmart, though. Wesfarmers has demonstrated itself to be a conservative and prudent manager of capital for decades. Given the ongoing dominance of this income stock's underlying businesses, Wesfarmers arguably seems primed to continue its track record.

Lottery Corp Ltd (ASX: TLC)

Lottery Corp is the company behind most lotteries and Keno games across Australia. The temptation to win a jackpot is a universal one, and grips Australians regardless of the state of the broader economy. Given that Lottery Corp has exclusive licenses to run these services in most states and territories for years to come, this makes Lottery Corp a reliable income stock to consider for a retirement portfolio. The company pays a decent, and fully franked, dividend.

Australian Foundation Investment Co Ltd (ASX: AFI)

AFIC is a listed investment company (LIC) that invests in a broad portfolio of underlying shares itself. It has been following the same set of rules for decades and has consistently delivered decent returns for its investors, with a focus on capital protection. The beauty of stocks like AFIC is that the company's management makes the tough investment decisions for you, making it a true 'bottom-drawer' investment. AFIC pays a highly stable dividend income, which is also fully franked.

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Those retirement shares, you might argue, should have a decent starting dividend yield, for one. And preferably one that comes with full franking credits. But they may also want to have a somewhat diversified earnings base to provide a reasonable degree of capital protection.

After building out this core, investors can always add smaller positions to supplement that all-important income.

So today, let's talk about two ASX dividend shares that I think fit this bill nicely and would be excellent choices to build a retirement portfolio around.

Two ASX dividend income shares to build a retirement portfolio around

Wesfarmers Ltd (ASX: WES)

Wesfarmers has been a popular choice for ASX investors seeking reliable dividend income for decades, and for good reason. This diversified ASX 200 conglomerate has been making generous shareholder payments for many years and has consistently demonstrated a savvy and prudent approach to capital management, benefiting its investors.

Wesfarmers is most famous for its ownership of some of Australia's best retailers, including Bunnings, Kmart and OfficeWorks. But this dividend share also owns a diverse range of other companies, spanning mining and chemical manufacturing, to pharmacies and a clothing line.

This provides the company with a diversified earnings base, from which it has consistently paid a decent dividend. With full franking credits attached too.

Given this ASX dividend share has recently pulled back significantly (and thus is available with a higher dividend yield), it may be a good opportunity for income investors to build out a position for their retirement portfolios.

Australian Foundation Investment Co Ltd (ASX: AFI).

The Australian Foundation Investment Co, or AFIC for short, is a listed investment company (LIC) that has also been present on the ASX for decades. Like most LICs, AFIC works by owning its own underlying portfolio of ASX shares, which it manages on behalf of its shareholders. This portfolio mostly consists of other ASX blue chip companies, although AFIC also does some investing in international markets. Diversification: tick.

This ASX dividend share has been around since 1928. Over this long history, it has consistently demonstrated that its prudent management style has paid off for investors. The AFIC share price has been stagnant over 2025, though, so it might be a good time to take a look at this company too, given its fully franked dividend yield is well over 3.5% today.

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CBA is now a huge business and I'd suggest it's going to be challenging to increase its market share much more because of the competition from various players such as Macquarie Group Ltd (ASX: MQG), Westpac Banking Corp (ASX: WBC), ANZ Group Holdings Ltd (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB).

Unless CBA is willing to compete harder on price (the interest rate), I think its loan growth in the mortgage market will be fairly closely linked to the total loan system growth in Australia (and New Zealand), which isn't likely to be dramatically strong.

With the CBA share price now trading at a high valuation, its grossed-up dividend yield for FY26 is predicted to be just 4.3%, including franking credits, according to the forecast on Commsec. I'll highlight two ASX dividend shares with stronger passive income potential.

APA Group (ASX: APA)

APA is an energy infrastructure business which owns a variety of assets including a huge gas pipeline network across Australia, solar farms and wind farms, gas-powered energy generation, gas storage, gas processing and electricity transmission.

The business plays an important role in Australia's economy, transporting half of the country's gas usage. It continues to grow its energy portfolio, building new assets and acquiring others. The rising cash flow from its portfolio is helping fund rising payouts.

Indeed, its payout has grown every year over the last 20 years. Owners of CBA shares have suffered dividend cuts both during the GFC and the first year of COVID-19. APA has been much more resilient.

It's expecting to grow its annual payout to 58 cents per security in FY26, translating into a passive distribution income yield of 6.4%, significantly higher than Commonwealth Bank.

Australian Foundation Investment Co Ltd (ASX: AFI)

AFIC is a listed investment company (LIC) which largely invests in ASX blue-chip shares.

CBA is one of the businesses in the AFIC portfolio, though it was only an 8.5% weighting as of 30 September 2025.

One of the main reasons to like AFIC over CBA shares is that investing in the LIC means gaining exposure to a diversified portfolio as opposed to being invested in just one business.

Other businesses that AFIC is invested in include BHP Group Ltd (ASX: BHP), NAB, CSL Ltd (ASX: CSL), Westpac, Macquarie and Wesfarmers Ltd (ASX: WES).

Pleasingly, AFIC's annual ordinary dividend hasn't seen any cuts over the last two decades. In FY25, the business grew its annual ordinary dividend per share to 26.5 cents, which translates into a grossed-up dividend yield of 5.1%, including franking credits.

The ASX dividend share offers more passive income and diversification compared to CBA shares. Plus, it's currently trading at a discount of around 10% to its underlying value.

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ASX blue-chip shares tend to be mature businesses,. Because they don't have many places to invest, they have less reason to retain cash, which can lead to a pleasing dividend yield for shareholders.

Both of the blue chips below have pleasing dividend records, and I expect them to continue to pay out pleasing dividends for the foreseeable future.

Medibank Private Ltd (ASX: MPL)

Medibank is Australia's largest private health insurer with its Medibank and ahm brands.

Healthcare is a defensive sector, and I appreciate how investing in this private health insurer gives exposure to various areas of the industry, rather than a company focused on one specific device or drug.

Turning to the income, aside from 2020, the company has increased its annual dividend per share every year since 2015, when it first started paying a dividend.

In FY25, it hiked its annual dividend per share by 8.4% to 18 cents, which translates into a grossed-up dividend yield of 5.3%, including franking credits.

A key driver of the earnings, which pays for dividends, is policyholder growth. In FY25, net resident policyholder growth was 1.4% and net non-resident policy unit growth was 3.1%. This helped drive health insurance operating profit higher by 7.1% and underlying earnings per share (EPS) up by 8.5%.

In FY26, the ASX blue-chip share is expecting volume growth in the Medibank brand and to maintain solid gross profit growth with its non-resident health insurance.

Australian Foundation Investment Co Ltd (ASX: AFI)

This business is the largest listed investment company (LIC) in Australia, and it's also one of the oldest. It has been a very stable long-term investment for investors.

Commonly known as AFIC, it invests in a portfolio of ASX blue-chip shares for shareholders to try to generate capital growth and cash flow from dividends.

It's invested in ASX blue-chip share names like BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), CSL Ltd (ASX: CSL), National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC), Macquarie Group Ltd (ASX: MQG), Wesfarmers Ltd (ASX: WES), Goodman Group (ASX: GMG), Transurban Group (ASX: TCL), and Telstra Group Ltd (ASX: TLS).

AFIC has provided investors with an incredibly stable (ordinary) dividend this century, and I expect that record to continue. In FY25, the company slightly increased its annual dividend per share to 26.5 cents and declared a special dividend of 5 cents per share.

Using the latest annual ordinary dividend, AFIC's grossed-up dividend yield is just over 5%, including franking credits.

At the time of writing, it's trading at a discount of more than 10% to its pre-tax net tangible assets (NTA) on 19 September 2025. That's one of the largest discounts of the past decade.

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If an investor wishes to take a path of lesser resistance, they only need to buy one Aussie stock for lifelong income.

However, if an investor is only going to buy one stock, it should arguably be one that is inherently diversified. Buying a company like Telstra Group Ltd (ASX: TLS) or Commonwealth Bank of Australia (ASX: CBA) won't cut it, as it opens one up to severe industry risk.

Luckily, there are quite a few Aussie dividend stocks that do fit the bill if an investor wishes to buy one income-producing stock to set them up for life.

Buying an Aussie dividend stock for lifelong income

It's my view that buying any one of the following Aussie stocks (or exchange-traded funds (ETFs)) will deliver that kind of sustainable income.

These Aussie income stocks can set anyone up for life.

To start with, an income-seeking investor could opt for either Argo Investments Ltd (ASX: ARG) or the Australian Foundation Investment Co Ltd (ASX: AFI). Both of these stocks are listed investment companies (LICs) that have been around for decades and own vast portfolios of underlying shares within them. These diversified portfolios, which are built on blue-chip stocks like Telstra and CBA, are managed on behalf of shareholders.

Both AFIC and Argo have long track records of providing substantial and fully franked dividend payments. As such, they make fine candidates for single, simple investments that can set income investors up for life.

Investors could also consider ETFs, though.

ASX ETFs for dividends?

Even a basic index fund like the Vanguard Australian Shares Index ETF (ASX: VAS) would make a compelling option. The ASX is home to dozens and dozens of strong dividend payers. This ETF houses them all and provides investors with what could be described as the average level of dividend income that the Australian stock market pays.

It has paid out four dividend distributions over the past 12 months, which gives this index fund a trailing yield of 3.09% today. As this yield does represent an average of the entire market, it does tend to fluctuate over time. But long term, the trajectory should be up-and-to-the-right.

If that yield doesn't look big enough, investors also have the option to go for an ASX ETF that prioritises maximising income. Two ETFs that could fit this bill include the Vanguard Australian Shares High Yield ETF (ASX: VHY) and the BetaShares S&P Australian Shares High Yield ETF (ASX: HYLD).

These funds hold a basket of underlying shares, all selected on their ability to fund large, sustainable income into the future. Again, the dividend distributions from these funds will differ from year to year. Both are offering trailing yields well north of 4% right now.

Foolish Takeaway

Those investors seeking dividend income need not build out a full portfolio of dozens of dividend shares. Any one of the options named above would, at least in my view, be a perfectly adequate lifelong income investment on its own merits.

If you choose one, invest as much as you can, and as often as you can, and reinvest all dividends to start with. Your passive income will snowball and become an avalanche before you know it.

The post The only Aussie stock you'll need for lifelong income appeared first on The Motley Fool Australia.

Argo Investments Limited (ASX: ARG)

The venerable Argo Investments is one of Australia's oldest and largest listed investment companies. Established in 1946, it has delivered consistent returns to shareholders. The firm now invests about $8 billion on behalf of more than 89,000 shareholders and has delivered an annualised total shareholder return of 6.2% over the past decade.

Australian Foundation Investment Company (ASX: AFI) 

AFIC's 10-year returns are almost a carbon copy of Argo's, coming in at 6.5%, and the similarities don't end there. AFIC is even older than Argo, established in 1928, and similarly looks to invest over the long term, focusing on safety and dividend payments. Investing in AFIC gives exposure to Australia's top blue-chip shares, with its largest holdings in stocks such as BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), and CSL Ltd (ASX: CSL).

Washington H Soul Pattinson & Company (ASX: SOL)

Soul Patts, as this investment outfit is generally known, has hit it out of the park over the past 12 months, delivering shareholders a return of 31.7%, and 14.4% over the past decade. The fund boasts that it has not missed a dividend payment since it was listed in 1903 and has increased dividend payments in each of the past 24 years.

WAM Leaders (ASX: WLE)

This fund looks to invest in large-cap companies "with compelling fundamentals, a robust macroeconomic thematic and a catalyst''. It claims to have returned 12.5% per annum since May 2016 and now manages just under $2 billion, so it must be doing something right. Currently, the fund's fully-franked dividend yield is sitting at 7%.

Ophir High Conviction Fund (ASX: OPH)

This fund looks to find high-quality companies which are generating good cash returns before the rest of the market catches on, or in their own words, when they are "typically under-researched and undervalued by the investment market''. The fund has notched up more than 300% in total net returns since inception in August 2015 and an impressive 26.7% over the past 12 months.

The post These are the five stocks I'd build a long-term portfolio around appeared first on The Motley Fool Australia.

The business is Australia's largest listed investment company (LIC) – it focuses on large Australian blue-chip shares that can provide good returns for the AFIC portfolio.

For shareholders, the objective is to provide attractive investment returns through "access to a growing stream of fully franked dividends and enhancement of capital invested over the medium to long term".

I'll run through why I think this is a good time to invest in the ASX dividend stock.

Very attractive valuation

As a LIC, the business regularly tells investors about what it's underlying value is. That can essentially be measured by the net tangible assets (NTA).

AFIC tells investors every week and every month what its NTA is, so we get a regular insight into the real value of the business.

At 31 August 2025, it had a pre-tax NTA of $8.34, so the current AFIC share price is trading at a discount of 13% to that figure. This is close to the largest discount it has traded at over the past decade.

I'm a fan of being able to buy quality assets for less than they're worth. A decade low when it comes to the discount seems appealing to me.

Dividend yield

In terms of the ordinary dividend, AFIC paid an annual dividend of 26.5 cents per share in the 2025 financial year.

The company also paid a special dividend of 5 cents per share, but I'm not expecting that to be repeated in FY26, so I'm not going to include that in the dividend yield calculation. The ASX dividend stock's payout has been extremely stable and predictable this century. I'm not expecting the LIC to reduce its dividend in FY26.

Thanks to the 16% fall of the AFIC share price since its peak in January 2022, as the below chart shows, the grossed-up dividend yield is now 5.2%, including franking credits. That's much better than what a 12-month term deposit is offering these days.

Diversification

One of the best reasons to like AFIC is because of how it gives investors significant diversification with a whole portfolio, it's not just a singular business like a bank, retailer or miner.

It has dozens of holdings including BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), CSL Ltd (ASX: CSL), National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC), Macquarie Group Ltd (ASX: MQG), Wesfarmers Ltd (ASX: WES) and Goodman Group (ASX: GMG). These are high-quality businesses and leaders at what they do.

Pleasingly, there are five sectors with a weighting of more than 9%, including banks, miners, healthcare, industrials and other financials. That's a good spread of industries – it's more diversified than the S&P/ASX 200 Index (ASX: XJO) which is weighted towards banks and miners.

While I'm not expecting huge returns from the LIC, I think it can provide a mixture of pleasing passive income and long-term capital growth.

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