Yesterday, WAM Capital shares closed at $1.18. That was down 0.42% for the session.

At that price, WAM Capital was allegedly trading on a trailing dividend yield of 13.19%.

Yep, no typos, no misplaced decimal points. 13.19%.

The prospect of a 13.2% yield is more than enough to grab any investor's attention, regardless of whether they even invest primarily for income. After all, that implies that one would get back roughly $132 a year for every $1,000 invested. Incredible cash flow if accurate.

The market rarely offers up these sorts of opportunities, so is this a case of 'too good to be true'?

Well, let's work our way backwards to find out. WAM Capital has paid out two dividends over the past 12 months. The first was the October 2025 final dividend worth 7.75 cents per share. The second, the interim dividend from May, was also worth 7.75 cents per share. That 15.5 cents per share in dividends over the past 12 months gives WAM Capital that 13.2% yield at the current $1.18 share price.

Is the 13.2% dividend yield on WAM Capital shares for real?

Case closed, right? Well, not exactly. As any good dividend investor knows, a trailing yield only tells us what an investment has paid out over the past 12 months. It doesn't tell us a lot about what it might fund over the coming 12 months.

As we've discussed many times this year, there were many warning signs that WAM Capital was digging itself into a bit of a hole when it came to future payout ability. Its profit reserve, from which dividends can be funded, has all but run dry. WAM Capital itself acknowledged this reality last month. That was when the company told investors that:

Since FY2020, the Board has maintained WAM Capital's full year dividend at 15.5 cents per share. Over that period, the dividends paid by the Board exceeded the profits generated, drawing down the Company's accumulated profits reserve. Maintaining the dividend at 15.5 cents per share is no longer sustainable with the profits reserve available.

As a result, WAM Capital has told investors to only expect a total of 8 cents per share (two dividends worth 4 cents each) over 2027. Those will come partially franked at 60%. That's a cut worth 48.4%. Ouch.

If that is accurate (WAM Capital could downgrade it even further if necessary), WAM Capital shares would have a forward yield of 6.84% at current prices. Not 13.2%.

Of course, that is still a fairly sizeable yield. But bear in mind that it is largely a result of this LIC's share price collapse in 2026. Since the start of the year, WAM Capital shares have lost more than 35.3% of their value, including 22.5% since this dividend cut was announced. It's also worth noting that, as of 31 August, WAM Capital only had 5.7 cents in its profit reserve. This means that, as of today, it doesn't even have the cash on hand to fund 8 cents per share worth of dividends.

Investors might wish to tread very cautiously indeed here.

The post Insane: Do WAM Capital shares really have a 13.2% yield? appeared first on The Motley Fool Australia.

These are essentially shares in ASX-listed companies that pay a portion of their profits to shareholders on an annual, twice yearly, or even a monthly basis. And sometimes these are even enhanced by tax-saving partially or fully-franked credits.

The good news is that there is a huge range of options available.

The hard part is finding the ASX shares with the dividend yield that you want.

Here are four ASX shares that pay a dividend yield of 8% or more.

Atlas Arteria Group (ASX: ALX)

Atlas Arteria owns, operates, and develops five toll roads in France, Germany, and the United States. The company's main asset is an estimated 31% stake in Autoroutes Paris-Rhin-Rhone, or APRR, which owns concessions to toll more than 2,300 kilometres of motorways in eastern France. The company also wholly owns the Dulles Greenway toll road in the US state of Virginia.

Toll road operators are a classically defensive asset and a great choice for passive income investors. The nature of their business, the fact that they operate essential infrastructure, often under long-term contracts, means they can usually generate a strong and stable income. 

Atlas Arteria consistently pays its shareholders 40 cents per unit, unfranked every year – one 20-cent payment in April, and another in October. At the time of writing, this translates to a dividend yield of around 9%.

Metrics Master Income Trust (ASX: MXT)

The Metrics Master Income Trust is a listed investment trust (LIT). Rather than investing into one stock, the trust has a portfolio of corporate loans and private credit investments, which is an increasingly popular asset class for income-focused investors. 

The trust said it targets a return of the Reserve Bank cash rate plus 3.25% per annum through the economic cycle. This is net of around 7.60% per annum fees. 

What's more, its distributions are paid monthly, and there is also a distribution reinvestment plan (DRP) to allow its investors to reinvest their monthly income distributions if they want.

The trust most recently paid a 1.46-cent dividend to shareholders earlier this month, unfranked. The latest dividend means that the fund has paid 12 dividends to investors over the past 12 months, totalling 15.8 cents per share. At the time of writing, this gives the trust a dividend yield of approximately 9%.

IPH Ltd (ASX: IPH)

IPH is an intellectual property (IP) services provider that owns a group of patented and trademarked firms. It's a great option for passive income investors because IP protection is a legal necessity. This means the company can generate consistent revenue, all without requiring any physical capital.

The company has a long history of paying two partially-franked dividends per year to its shareholders since 2016. And these have increased every year since 2017.

IPH's most recent dividend of 19.5 cents was paid to shareholders today (22nd of September), with 30% franking. That totals a 39-cent total dividend for FY26. This translates to an 11.5% dividend yield at the time of writing.

WAM Capital Ltd (ASX: WAM)

WAM is another LIC, but one that focuses on giving its shareholders exposure to an actively managed diversified portfolio of undervalued ASX-listed growth companies, specifically small-to-medium-sized businesses.

The LIC aims to give its investors a stream of fully-franked dividends, while also providing capital growth and preserving capital.

This company has paid out a 7.75-cent dividend twice a year, dating back to 2020. The next 7.75-cent payment, with 60% franking, will be paid to investors next month. Giving the ASX dividend shares around a 12.6% yield at the time of writing.

But you'll need to get in quick. As part of WAM's FY26 results announcement, the company reported a 10.5% decline in its investment portfolio. As a result, WAM announced it will be cutting its dividend to 8 cents per share in total in FY27 to "preserve capital".

The post 4 ASX shares that pay a dividend yield of 8% (or more) appeared first on The Motley Fool Australia.

The experts in charge of WAM Capital Ltd (ASX: WAM) have outlined some compelling opportunities in its portfolio that have pleasing outlooks.

WAM Capital is a listed investment company (LIC) – a company that invests in other shares to generate profits for shareholders. Which ASX shares? The LIC wants to find the "most compelling undervalued growth opportunities in the Australian market".

Let's dive into the two stocks that Wilson Asset Management highlighted as ideas in its August 2026 update.

EVT Ltd (ASX: EVT)

The first ASX share that WAM discussed was EVT, an Australian leisure and property company that operates cinemas, hotels and commercial properties. Its cinema chains are reportedly the largest in Australia and New Zealand.

The fund manager noted that the EVT share price rose in August following the release of its FY26 annual result. It shot up 18% during last month.

Wilson Asset Management highlighted that the ASX share's reported net profit after tax (NPAT) rose 51.9% year-over-year to $50.7 million. The company's board of directors declared a fully franked final dividend of 23 cents per share, representing a year-over-year rise of 4.5%.

WAM said that the FY26 result was ahead of the consensus of analysts' expectations, driven by the cinema segment.

The fund manager also noted the business plans to divest approximately $800 million of non-core property assets, as well as an independent strategic review of the group structure.

WAM said the proposed asset divestments are expected to support hotel growth and potential special dividends, while the strategic review is a potential catalyst to unlock further shareholder value.

FDC Consolidated Holdings Ltd (ASX: FDC)

The other ASX share that Wilson Asset Management wanted to highlight was FDC, an integrated construction and building services company that delivers major construction, fit-out and refurbishment solutions across Australia.

The FDC share price also increased by 19% in August 2026. This positive performance was in response to the company's first annual result as an ASX-listed company.

FDC reported that revenue grew by 13% year-over-year, which reflected the strength of its diversified business model and national footprint, according to WAM. There was double-digit growth across its construction, fit-out and refurbishment segments.

WAM then pointed out that FDC also reaffirmed its FY27 prospectus forecasts and highlighted a diversified project pipeline, which supported confidence in the ASX share's future earnings growth.

The post Why a fund manager loves these ASX shares right now appeared first on The Motley Fool Australia.

WAM Capital is a listed investment company (LIC) that has been on the ASX since 1999. Over this time, it has built up a reputation as a generous dividend payer. However, the company has struggled in recent years, with investors enduring a savage share price decline.

To illustrate, WAM Capital shares last topped out at about $2.50 a share back in 2017. Today, the company has opened sharply lower. WAM Capital shut up shop at $1.51 a share yesterday. But this morning, those same shares opened at $1.40 each before descending to $1.28 at the time of writing. That's a one-day loss of 15.2%.

That puts this company's losses over the past 12 months at 25.7%. Shareholders who have held on for the past five years are down a horrid 43.9%.

In other words, WAM Capital's generous dividends have been the only thing saving investors' returns. But now that looks set to change too.

WAM Capital shares plunge as dividend slashed 50%

As part of its latest earnings, released this morning, WAM Capital revealed that it can no longer afford to maintain the 7.75-cents-per-share dividend every six months. That's the payout investors have been receiving on a biannual basis since FY 2020. Investors will receive a final dividend of 7.75 cents per share, partially franked to 60%, in October. But that will be the last of its kind, for at least a while.

In these earnings, WAM Capital has "announced an FY2027 full-year dividend target of 8.0 cents per share, comprising an interim dividend of 4.0 cents per share and a final dividend of 4.0 cents per share".

This means that 2027's payouts will be worth approximately half of the dividends that investors have become used to over the past six years or so. It is a calamitous and embarrassing moment for the company, whose investors will now enjoy the same record-low level of dividend income that they last received in 2009. As we've warned investors about, the dividends needed to be slashed because of the lack of profits to fund them. Here's how WAM Capital justified it:

Since FY2020, the Board has maintained WAM Capital's full year dividend at 15.5 cents per share. Over that period, the dividends paid by the Board exceeded the profits generated, drawing down the Company's accumulated profits reserve. Maintaining the dividend at 15.5 cents per share is no longer sustainable with the profits reserve available.

WAM Capital has also told investors that they should not bank on getting 8 cents per share in dividends next year either, stating "the FY2027 dividend target is not a forecast or commitment of future dividends". No wonder WAM Capital shares are copping a beating this Friday.

The post Ouch: WAM Capital shares crash 15% as dividend cut in half appeared first on The Motley Fool Australia.

What did WAM Capital report?

• Full year FY2026 dividend of 15.5 cents per share, partially franked at 60%, maintained
• Final dividend of 7.75 cents per share, payable 21 October 2026
• Operating loss after tax of $125.9 million (FY2025: profit of $219.6 million)
• Investment portfolio declined 10.5% in FY2026, underperforming key ASX indices
• FY2027 dividend target reduced to 8.0 cents per share to preserve capital
• Pre-tax net tangible assets (NTA) at $1.22 per share at 30 June 2026

What else do investors need to know?

The Board's decision to cut the FY2027 dividend target to 8.0 cents per share comes after years of paying out more in dividends than was earned, drawing down the profits reserve from $1.48 per share to just 5.6 cents per share after the latest payout. The reduction aims to protect WAM Capital's capital base and rebuild its profits reserve.

In FY2026, WAM Capital's portfolio underperformed compared to the broader S&P/ASX All Ordinaries Accumulation Index (up 5.7%) and S&P/ASX Small Ordinaries Accumulation Index (up 8.1%). The main challenges were sector positioning and tough conditions for small-cap industrials, as larger companies and AI beneficiaries attracted most investor attention.

WAM Capital remains focused on a diversified portfolio, with notable holdings in Artrya Limited, GemLife Communities, Aussie Broadband, and Maas Group. The investment team has increased cash holdings (11.5% of the portfolio) and repositioned assets looking for better returns in FY2027.

What did WAM Capital management say?

Chairman Geoff Wilson AO said:

Since FY2020, the Board has maintained WAM Capital's full year dividend at 15.5 cents per share. Over that period, the dividends paid by the Board exceeded the profits generated, drawing down the Company's accumulated profits reserve. Maintaining the dividend at 15.5 cents per share is no longer sustainable with the profits reserve available.

We recognise the impact a reduction in the FY2027 full year dividend target to 8.0 cents per share will have on shareholders. The FY2027 target is intended to rebuild the profits reserve, preserve the Company's capital base and place WAM Capital in a stronger position to deliver sustainable income and capital growth for shareholders.

What's next for WAM Capital?

The Board has set a more sustainable FY2027 dividend target, aiming for 8.0 cents per share, split evenly between interim and final dividends, still partially franked at 60%. Achieving this will depend on generating additional profits through positive portfolio performance in FY2027, so the dividend target is not a formal forecast or guarantee.

Management is optimistic about the potential for recovery, particularly for undervalued smaller companies, as interest rates stabilise and market conditions improve. WAM Capital plans to maintain its active, diversified approach and is positioned to benefit if conditions for small-to-mid-cap stocks pick up.

View Original Announcement

The post WAM Capital trims FY27 dividend after portfolio setback in FY26 appeared first on The Motley Fool Australia.

The popular ASX dividend stock I am referring to is none other than WAM Capital Ltd (ASX: WAM). Yep, WAM Capital shares are, at the time of writing, asking $1.58 a share. At this price, the listed investment company (LIC) is trading on a dividend yield of 9.84%. Today, let's discuss this dividend yield, and why yields at this height are usually a waving red flag.

As a LIC, WAM Capital owns and manages a portfolio of underlying investments on behalf of its shareholders. In WAM Capital's case, this portfolio is made up of "undervalued growth companies", usually of the small- to mid-cap variety, that WAM Capital has identified as possessing some kind of pricing catalyst that will see their value rise in the near future.

Some current holdings (as of 31 July) include Eagers Automotive Ltd (ASX: APE), Codan Ltd (ASX: CDA), DigiCo Infrastructure REIT (ASX: DGT), and Zip Co Ltd (ASX: ZIP).

WAM passes on any profits made from its arbitrage trades, as well as any dividends it receives from its holdings, on to investors in the form of its own dividends.

Why this ASX dividend stock's near-10% yield is a red flag

A company's dividend yield is a function of its share price just as much as its underlying dividend per share. As such, anyone who spots a company with a yield this high must ask themselves why the market is pricing it that way. The answer is usually that there is a high level of risk associated with that yield.

So where does the risk come from in the case of this particular ASX dividend stock? Well, let's go through some numbers.

Since 2018, WAM Capital has paid out two dividends a year, each worth 15.5 cents per share. However, the company tells us that, again as of 31 July, it had just 13.3 cents per share in its profit reserve. That's the pot where its dividends are funded from. There's clearly not much left in the tank. If WAM Capital doesn't replenish those profits soon, investors are at serious risk of a dividend cut. If that does eventuate, that 9.84% yield wouldn't be long for this world.

This company doesn't exactly have a glowing history either. For whatever reason, WAM no longer lists its recent performance figures on its site. However, a quick look at its share price will tell you all you need to know. Today, WAM Capital shares are trading at the same level they were way back in early 2002. Over the past decade, its share price has lost about a third of its value, probably not assisted by the company's rather hefty 1% per annum management fee.

Foolish takeaway

That tells us that its dividends are the only real source of shareholder returns. Given the apparent precariousness of these payouts, it's not hard to see why the market is pricing in so much risk to that yield.

Sometimes, a yield that looks too good to be true just might be that. Investors should always tread with extreme caution when red flags this large are waving in the wind.

The post This popular ASX dividend stock has a 10% yield. That's a problem appeared first on The Motley Fool Australia.

WAM is in charge of a number of listed investment companies (LICs) such as WAM Capital Ltd (ASX: WAM), WAM Microcap Ltd (ASX: WMI) and WAM Active Ltd (ASX: WAA).

The investment team in charge of the WAM portfolios have picked out a few stocks that could be among the most exciting ideas on the ASX with a possible catalyst that could send the share price higher.

Let's look at two of those ideas.

Artrya Ltd (ASX: AYA)

WAM described Artrya as a medical technology company that uses AI to assist clinicians in the diagnosis and management of coronary artery disease.

The fund manager noted that the Artrya share price declined during July, which WAM suggested reflected a "knee-jerk" reaction from investors to the pace of revenue conversion from customer deployments, a view management has subsequently clarified.

WAM also said that market sentiment towards AI-related growth companies during the period weighed on the Artrya share price.

The investment team highlighted that Artrya has continued to progress in its US commercial rollout, with the company announcing that it has begun generating revenue from its second active US commercial customer and that its Salix platform was deployed in a major US healthcare network.

WAM believes the company continues to make strong progress on building a pipeline of further potential customers, while progressing FDA approval of its second blood flow module, which of which represent "key near-term catalysts" along with potential inclusion inside the S&P/ASX 300 Index (ASX: XKO).

Advanced Innergy Holdings Ltd (ASX: AIH)

Another ASX share that could be an attractive investment right now is the ASX share Advanced Innergy. This company designs, manufactures and installs specialised insulation, fire protection, buoyancy and cable protection systems for the global energy, marine and industrial sectors.

WAM suggested that the Advanced Innergy share price went backwards during July as the market digested the earnings and balance sheet implications of its $90 million acquisition of Matrix Composites & Engineering.

The fund manager thinks the acquisition is strategically attractive, combining the second and third largest participants in the sector.

However, the market reacted negatively, reflecting concerns about the earnings multiple paid for the acquisition, the expected near-term earnings contribution from Matrix and the increase in debt levels due to the acquisition. The timing of Middle East projects and higher input costs also contributed to near-term uncertainty.

WAM then said that synergies are expected to build over time as the businesses are integrated.

The fund manager concluded:               

We remain confident in Advanced Innergy Holdings as it continues to benefit from a strong order book and favourable industry fundamentals, which should support earnings growth as the acquisition is integrated and synergies are realised over time.

The post This fund manager thinks these ASX shares are buys and have big potential! appeared first on The Motley Fool Australia.

For investors who are looking for an income stream rather than capital gains, it pays to go with Australian-based companies that have committed to paying dividends over the medium to long term, and exchange-traded funds specifically set up to pay high dividends.

How much do you need to generate $500 per week?

So, let's look at the yields you'll need for a $500 per week return. This, of course, translates to $26,000 a year.

So, what dividend yields do stocks normally pay?

According to S&P Dow Jones, the S&P/ASX 200 Index (ASX: XJO) delivered an average trailing dividend yield of 4.15% from July 2011 to December 2024.

But this includes plenty of companies that pay low or no dividends.

I'd argue it's quite possible to aim for a portfolio that delivers a dividend yield of around 5%, while also including some companies that pay a lot more.

At a 5% yield, you'd need a portfolio worth $520,000 to deliver $500 a week.

At a 7.5% yield you'd need just $346,666.

At a 10% yield you'd need just $260,000.

While there are stocks which pay more than a 10% yield, these are few and far between, and I'd argue that those sorts of yields are likely to be unsustainable.

What ASX shares can I invest in to achieve $500 in income?

On the ETF front, the Australian Dividend Harvester Active ETF (ASX: HVST) is currently paying a yield of 5.8%, which sits firmly in the ballpark of returns targeted.

There is also the Vanguard Australian Shares High Yield ETF (ASX: VHY) which has major holdings in BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA) and Rio Tinto Ltd (ASX: RIO).

This ETF currently pays a dividend yield of 5.47%.

Another income-focused security is WAM Capital Ltd (ASX: WAM), which is currently paying a trailing dividend of 10.4%, 60% franked.

Among the miners Fortescue Ltd (ASX: FMG) pays a healthy trailing dividend of 6.37% currently, while toll roads operator Atlas Arteria Ltd (ASX: ALX) – should it survive a current takeover approach – has committed to paying a dividend of 60 cents per share, or well over 10%.

Three other companies which are currently paying out better than 5% dividends are AGL Energy Ltd (ASX: AGL), APA Group (ASX: APA), and Stockland Corporation Ltd (ASX: SGP).

Other solid companies which pay a bit less than we're after are Telstra Ltd (ASX: TLS) with a yield of 3.93% and Westpac Banking Corporation (ASX: WBC) which pays a trailing yield of 4.37%.

So as you can see, with some diversification across stocks such as these, a 5% dividend yield appears to be within reach.

The post How to get started with a portfolio delivering $500 a week in passive income appeared first on The Motley Fool Australia.

Starting early and reaping the benefits of compound interest are key to ending up with a superannuation nest egg that will furnish you with a comfortable retirement, but it's good to know what that actually means.

The Association of Superannuation Funds of Australia (ASFA) regularly publishes its retirement standard, which currently estimates that homeowners aged 65 and over now need $77,375 annually for a comfortable retirement as a couple, and $54,840 for a single.

Using our yardstick of $1500 per week, this would put a single person firmly in comfortable territory, which is measured by assessing the affordability of things like top-level private health insurance, a reasonable car, and the ability to travel occasionally.

By the numbers

But how much in investments do you need to earn $1500 a week, or $78,000 a year?

Using a dividend yield of 5% per year, you'd need $1.56 million in your super to reap $78,000 a year, assuming there was no drawdown of capital.

So is 5% achievable? According to S&P Dow Jones, the S&P/ASX 200 Index (ASX: XJO) delivered an average trailing dividend yield of 4.15% from July 2011 to December 2024.

But this includes plenty of companies that pay low or no dividends. I'd argue it's quite possible to aim for a portfolio that delivers a dividend yield of around 5%, while also including some companies that pay a lot more.

You also have to take into account that for some retirees, superannuation earnings and distributions are tax-free.

Let's see how this affects the dividend payment of a company like Westpac Banking Corp (ASX: WBC).

Westpac pays a trailing dividend yield of 4.38%, according to the ASX website.

But Westpac has already paid 30% company tax on that dividend, which gets refunded to the retiree, boosting the dividend yield to 6.26%.

Aiming for income

There are also securities that aim specifically for a high dividend yield. One of these is the Australian Dividend Harvester Active ETF (ASX: HVST).

HVST aims "to exceed the net income yield of the broad Australian share market on an annual basis, paid monthly''.

Currently, its gross annual yield is running at 7.4%.

Another income-focused security is WAM Capital Ltd (ASX: WAM), which is currently paying a trailing dividend of 10.3%, 60% franked.

When it comes to companies, I've also recently written about three that are paying out better than 5%. These were AGL Energy Ltd (ASX: AGL), APA Group (ASX: APA), and Stockland Corporation Ltd (ASX: SGP).

At a 5% fully franked yield, the grossed-up yield increases to 7.1%, which would reduce the lump sum needed to generate a $78,000 yearly income to $1.09 million.

The post How much do I need in my superannuation to get $1500 per week in passive income? appeared first on The Motley Fool Australia.

For those who are targeting high dividends, it pays to keep an eye out for the stocks and funds that are paying out well, but which can still be bought cheaply on a yield basis.

I've selected three that might fit the bill. Let's have a look.

Ophir High Conviction Fund (ASX: OPH)

The Ophir High Conviction Fund only pays out a dividend once a year. The good news is it's not too late to buy in.

The ex-dividend date for the upcoming 35.17-cent-per-share dividend is June 30, so you'd have to move relatively quickly to be able to take advantage of it.

Given the Ophir share price is currently $2.86, the shares are paying a dividend yield of 12.3%.

It must be said that the shares are currently down 13.9% over a 12-month period, and are trading at a discount to the fund's net asset value of $3.18.

Ophir's top five holdings are in A2 Milk Company Ltd (ASX: A2M), MAAS Group Holdings Ltd (ASX: MGH), Mineral Resources Ltd (ASX: MIN), ResMed Inc (ASX: RMD), and SuperLoop Ltd (ASX: SLC).

Atlas Arteria Ltd (ASX: ALX)

Atlas Arteria has announced a 50% boost to its full-year dividend payout as it moves to fend off a takeover bid from Diamond Infraco.

The toll roads operator previously had a dividend target of 40 cents per share, but on Monday morning, it said in a statement to the ASX that this target would be increased to 60 cents per share.

At the company's current share price of $5.10, that equates to a full-year dividend yield of 11.8%.

The company said on Monday:

The Independent Directors now intend to target paying distributions to ALX Securityholders of at least 60.0 cents per ALX Security in the 12 months following the end of the Offer Period made up of ordinary distributions of 40.0 cents per ALX Security and additional distributions of at least 20.0 cents per ALX Security. These distributions are expected to be funded by a combination of distributions from Atlas Arteria's portfolio cash flows, proceeds from potential asset sales and, where appropriate, utilising corporate borrowing proceeds.

WAM Capital Ltd (ASX: WAM)

This fund has paid out a 7.75-cent dividend twice a year like clockwork in recent times, giving it a dividend yield of 10.1%.

Part of well-known investor Geoff Wilson's stable, the fund's portfolio has returned an annualised 14.5% return since 1999, compared with 8.5% for the S&P/ASX All Ordinaries Index (ASX: XAO).

The fund said in a recent statement that one of its top performers had been network-as-a-service provider Megaport Ltd (ASX: MP1), while telco Tuas Ltd (ASX: TUA) was a drag on the portfolio.

The post Targeting a dividend yield above 10%? Try these shares on for size appeared first on The Motley Fool Australia.

Tuas is one of the holdings inside the WAM Capital Ltd (ASX: WAM) portfolio – Wilson Asset Management is a fund manager backing the business.

WAM Capital is one of the largest listed investment companies (LICs) on the ASX, with a market capitalisation not far from $2 billion. It aims to invest in the most compelling undervalued growth opportunities in the Australian share market.

Let's look at why the ASX 300 share is so compelling.

What happened to the ASX 300 share?

The Wilson Asset Management team described Tuas as a telecommunications company that owns and operates the SIMBA mobile network in Singapore.

WAM noted that the Tuas share price has declined significantly on the back of an update from the Singaporean telecommunications regulator Infocomm Media Development Authority (IMDA), which halted its review of Tuas' proposed acquisition of M1 Limited.

That proposed acquisition did not proceed before the 21 May 2026 deadline because of revelations that Tuas' subsidiary, Simba, may have been using radio frequency bands that it was not authorised to use.

WAM noted that Simba is cooperating with the regulator's investigation and continues to operate its network in Singapore.

Why are Tuas shares an opportunity?

The investment team said that while the news is disappointing, WAM has "strong conviction" in the underlying business which has "outperformed significantly" since the acquisition announcement last year.

WAM believes the ASX 300 share can continue to grow strongly, supported by differentiated products in both the mobile and fixed line space of the Singapoean telco market.

The company's latest update showed significant growth by the business.

In the first half of FY26, Tuas reported revenue growth of 26% to S$91.9 million, with underlying operating profit (EBITDA) jumped 27% to S$42.1 million. Tuas said the faster EBITDA growth reflected "strong operational leverage". Pleasingly, the underlying EBITDA margin improved to 46%, up from 45% in the first half of FY25.

The revenue growth was largely driven by expansion in both mobile and broadband users. Mobile users rose 21.7% to 1.4 million and the relatively new broadband division saw subscriber growth of around 32,000 to 46,000.

It's important to remember that the business generated S$18.7 million of underlying net profit and S$50.1 million of operating cash flow in the first half of FY26. If it can grow earnings from here, it can justify a higher valuation.

Plus, it now has a large amount of cash to use for growth. With the M1 deal not going ahead, it could use that money to expand into other markets.

Tuas is certainly a higher-risk investment with the company under regulatory attention, so there may be other ASX shares that may have an easier path to growth.

The post This ASX 300 share is down 63% in 2026: Experts think it's a buy! appeared first on The Motley Fool Australia.

A small group of ASX shares are set to go ex-dividend in May.

In order to receive a dividend, you must own the ASX share before its ex-dividend date.

So, if you're looking for some income opportunities this month, these ASX shares may be of interest.

Ex-dividend dates also provide another opportunity.

Share prices typically fall on their ex-dividend dates, so you may be able to pick up a stock you've been watching for a lower price.

Among the shares going ex-dividend this month are ASX 200 gold share Newmont Corporation CDI (ASX: NEM).

Newmont will trade ex-dividend on 26 May. The miner will pay investors a dividend of 25.4 cents per share on 22 June.

Several of Wilson Asset Management's listed investment companies (LICs) will also go ex-dividend this month.

These include Wam Capital Ltd (ASX: WAM), which will trade ex-dividend on 18 May.

Wam Capital investors will receive a dividend of 7.75 cents per share on 29 May.

ASX shares with ex-dividend dates this month

The post 16 ASX shares going ex-dividend in May appeared first on The Motley Fool Australia.

Let that sink in for a moment. We have a stock that is ostensibly offering to return $9 a year in cash flow for every $100 invested. That's almost twice what you could expect from a savings account or term deposit right now. And more than twice what other popular dividend stocks, ranging from Coles Group Ltd (ASX: COL) to Commonwealth Bank of Australia (ASX: CBA) and Telstra Group Ltd (ASX: TLS), currently have on the table.

So, does that 9% yield make WAM Capital shares a screaming buy for income-hungry investors, or investors more generally?

Well, as you might suspect, the answer is definitely not an unambiguous 'yes'. Whenever the market is offering a stock with a 9% yield, one should always exercise a high degree of caution. After all, if that kind of yield was a sure thing, investors would flock to its shares, pushing up the price and lowering the running yield.

That is clearly not happening with WAM Capital, so we must ask ourselves why.

Does a 9% yield make WAM Capital shares a screaming buy?

Well, our first red flag is the WAM Capital share price itself. This is not what one might call a high flyer. At the current share price, this LIC has lost more than 24% of its value over the past five years. In fact, investors who bought WAM Capital shares ten years ago would also be down by about 25% from their initial investment.

This indicates to us that WAM Capital pays out all of its profits, and then some, as dividends.

WAM Capital's dividends also look to be on shaky ground. Over 2025, this company paid an annual dividend of 15.5 cents per share. As of the company's most recent update, it appears that WAM Capital has only 21.1 cents per share in its 'profit reserve', which it uses to fund its dividends. That means WAM Capital can only afford another 12-18 months of payouts if this reserve isn't topped up.

So, it seems the market has weighed up all this and decided there is a high risk of lower dividends from WAM Capital going forward. This company could well be a reliable source of dividend income for investors who buy today. But given the company's poor share price performance over many years and its near-empty profit reserves, investors should at least consider the not-insignificant risks of this stock.

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What did WAM Capital report?

• Revenue: $43.5 million, down 82.3% from the prior half
• Net profit after tax (NPAT): $24.1 million, down 83.9%
• Profit before tax: $30.2 million, down 85.5%
• Interim dividend: 7.75 cents per share, 60% franked, payable 29 May 2026
• Net tangible asset backing (after tax) per share: $1.61 (down from $1.68)
• Total shareholder return: 22.6% including franking credits for the half-year

What else do investors need to know?

WAM Capital's investment portfolio gained 2.0% over the half, trailing the S&P/ASX All Ordinaries Accumulation Index return of 4.4% and the Small Ordinaries' 17.4%. The value of the portfolio increased by $40.5 million, with returns weighed down compared to last year's stronger performance.

The board confirmed the company's fully franked dividend focus. Shareholders will receive the interim dividend with eligible participants able to access the dividend reinvestment plan at a 2.5% discount to the prevailing market price.

What's next for WAM Capital?

Looking ahead, WAM Capital aims to preserve capital while continuing to pay steady dividends to shareholders. The level of franking on future dividends depends on tax paid on realised profits, while ongoing performance will be shaped by broader market cycles, the investment manager's strategy, and economic conditions.

Management says it remains focused on supporting capital growth and maintaining a strong risk and governance framework, leveraging the depth of its investment team. Investors should consider the company's focus on small-to-medium ASX-listed businesses and the ongoing volatility in equity markets.

WAM Capital share price snapshot

Over the past 12 months, WAM Capital shares have risen 7%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 11% over the same period.

View Original Announcement

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WAM Capital is a listed investment company (LIC) that targets "the most compelling undervalued growth opportunities in the Australian market".

In other words, it's searching largely beyond the 100 largest businesses on the ASX for potential buys. Let's look at two of the companies it thinks are good ideas right now.

Codan Ltd (ASX: CDA)

WAM describes Codan as a manufacturer and supplier of communications, metal detection and mining technology.

The fund manager highlighted that in January the company announced a trading update regarding its FY26 first-half.

That update included $394 million total revenue and an underlying net profit after tax (NPAT) that's likely to be more than $70 million, representing increases of 29% and 52% year-over-year, respectively.

The ASX share's overall revenue included approximately $222 million from the communications segment, which was up 19% year-over-year. The rest of the revenue came from approximately $168 million of metal detection sales, primarily from gold detector sales in Africa.

The fund manager explained that the scale of the earnings upgrade and strength across both divisions were the key drivers of the market's positive view on the Codan share price.

WAM said that the team "remain positive on the outlook, underpinned by defence sector and gold price tailwinds."

Life360 Inc (ASX: 360)

The fund manager described Life360 as a location-based tracking software and safety company.

WAM noted that the Life360 share price has been caught up in the broader sell-off across the technology sector due to perceived fears about disruption from artificial intelligence (AI).

This decline has occurred despite the ASX share providing a "strong" preliminary FY25 trading update in January. Key metrics that the market had concerns about came ahead of expectations, such as monthly active users (MAU) and paying circles both growing strongly.

WAM said this performance suggested a "robust runway" for ongoing penetration growth remains within the core US market. The fund manager noted that the Life360 share price increased 27% on the day of the announcement but subsequently gave up those gains.

The fund manager suggested that the current sentiment within the technology sector is "weak" and draws similarities to others such as the Resmed (ASX: RMD) worries about GLP-1 in 2023 or when the market was concerned about online competition for JB Hi-Fi Ltd (ASX: JBH) in 2017 and 2018.

While WAM said it's difficult to identify a particular catalyst that will shift market confidence on the technology sector, it's focused on identifying those technology companies where it believes the perceived threats of AI disruption are being overstated as the fund manager expects valuations and share prices to "rebound strongly" over time.

The post 2 compelling ASX shares this fund manager rates as buys! appeared first on The Motley Fool Australia.

Yep, WAM Capital shares are currently trading at a price of $1.82. At this price, this dividend share and listed investment company (LIC) is indeed trading with a trailing dividend yield of 8.49% at the time of writing.

That's more than double what you could expect from a term deposit or savings account right now. And well north of what most popular ASX dividend shares are paying investors at the moment.

So does this make WAM Capital shares a slam-dunk buy for income?

As with any investment offering such an outsized yield, it's worth digging a little deeper to determine whether this is a compelling cash flow opportunity or a dreaded dividend trap.

Is the 8.5% yield on WAM Capital shares too good to be true?

Well, WAM Capital shares' 8.5% yield is indeed legitimate. The company paid out two dividends over 2025. The interim dividend that was doled out in April, as well as October's final dividend, were both worth 7.75 cents per share. That annual total of 15.5 cents per share gets us to that 8.49% yield at the current $1.82 WAM Capital share price. In an added bonus for investors, those payments also came with some franking credits attached. Both payments were partially franked at 60%.

However, as any good dividend investor knows, dividend yields represent the past, not the future. For WAM to truly be a slam-dunk buy for income, investors would need to have a high degree of confidence that this LIC is able to continue to fund annual dividend payments of at least 15.5 cents per share for the foreseeable future. And that's where some red flags start to pop up.

Each month, WAM Capital tells investors how much cash it has in its 'profit reserve', which funds its dividends. This profit reserve is filled by both the underlying dividends that WAM Capital receives from its portfolio, as well as the proceeds of stock sales.

As of 31 December, this profit reserve stood at 21.1 cents per share. That means that WAM Capital only has enough cash to cover its payouts for about 18 months. As such, future dividends are highly dependent on this company's ability to continue to pick the right stocks.

Risk and reward

Now, it could get lucky. But there's also not much of a cushion for mistakes or misfortune. And unfortunately, WAM Capital's recent share price track record is not fantastic. If you had bought shares of this company five years ago today, you would have lost 18.5% of your capital investment. Over that same period, the S&P/ASX 200 Index (ASX: XJO) is up a healthy 35% or so.

The market doesn't let high-quality dividend payers sit with an 8.5% dividend yield for long. As such, the market consensus is that WAM Capital's dividend is highly likely to be unsustainable and that this stock is a high-risk investment. Now, things could work out well for WAM Capital shares. But they might also continue to go pear-shaped. And based on this company's recent performance, it's not a bet I'd be willing to take.

The post Does an 8.5% yield make WAM Capital shares a slam-dunk buy? appeared first on The Motley Fool Australia.

Two of those that have been performing well are from Geoff Wilson's Wilson Asset Management stable, with the $2.1 billion WAM Capital Ltd (ASX: WAM) a good starting place.

This managed fund has been around since 1999, and in recent years, one of the great things about it is its steady dividend payments.

Consistent returns

The fund has paid dividends every year since its formation and, in the past few years, has kept its final and interim dividends steady at 7.75 cents, franked to 60%.

Calculated at the current share price of $1.83, that's a trailing dividend yield of 8.47%.

The fund recently put out an investment update, which indicated its investment portfolio performance since inception back in 1999 was 15.3%, compared with the All Ordinaries Index's of 8.6% over the same period.

Some of WAM Capital's top holdings include Life360 Inc (ASX: 360), A2 Milk Company Ltd (ASX: A2M), and Flight Centre Travel Group Ltd (ASX: FLT).

Recent dividend boost

Also from the Geoff Wilson stable is WAM Active Ltd (ASX: WAA), a much smaller fund with a value of $82.6 million.

WAM Active has also been a steady dividend payer and recently announced an increased interim dividend of 3.2 cents per share as well as a special dividend of 1 cent per share.

This brought the annualised interim dividend yield up to 6.5%, or 9.3% grossed up.

Mr Wilson said at the time that the six-month investment portfolio performance for the fund had been the best since its inception 18 years ago, allowing the fund to pay the increased dividends, which are still available for investors, given the ex-dividend dates for each are in May and June.

Deputy portfolio manager Shaun Weick said the fund had been positioning itself in precious and base metals "as we believe these companies are well-positioned for near-term outperformance as the US continues to reduce interest rates, global growth improves and the US dollar moves lower''.

Some of WAM Active's top 20 holdings include Capstone Copper Corp (ASX: CSC), Zip Co Ltd (ASX: ZIP), and Alcoa Corporation (ASX: AAI).

The third fund, which is looking attractive from a trailing dividend yield perspective, is the Ophir High Conviction Fund (ASX: OPH), which is sitting on trailing returns worth 8.3%, unfranked.

Ophir's dividends have been less predictable than those of the previous two funds, but its portfolio performance since inception in 2012 has been robust, at 14%, easily surpassing its benchmark target.

Some of Ophir's top holdings include Megaport Ltd (ASX: MP1), ResMed Inc (ASX: RMD), and Infratil Ltd (ASX: IFT).

The post Looking for strong dividend yields? These three managed funds might fit the bill appeared first on The Motley Fool Australia.

There are some large winners that are well-known and grow profit virtually every year. But, small companies and cyclical businesses can also be exciting ideas if we buy them at the right time.

Experts from the funds management business Wilson Asset Management (WAM) have outlined two ASX shares in the WAM Capital Ltd (ASX: WAM) portfolio that could be exciting opportunities.

WAM could be well worth listening to because it has outperformed the S&P/ASX All Ordinaries Accumulation Index (ASX: XAOA) over the past three years, five years, ten years, and since inception in August 1999. Before fees, expenses and taxes, the WAM Capital portfolio has returned an average of 15.3% per year since 1999.

Maas Group Holdings Ltd (ASX: MGH)

WAM describes Maas Group as a diversified Australian construction materials, equipment and services provider with exposure across civil infrastructure, renewables, mining and real estate markets.

The fund manager pointed out that the Maas share price rose in December after the company announced a major project worth approximately $200 million for its electrical infrastructure subsidiary called JLE Group.

This project aims to supply, deliver and install modular electrical infrastructure for an artificial intelligence (AI) factory builder and operator with the delivery expected throughout the 2026 calendar year.

Excitingly, the project has enabled the ASX share to expand its addressable market into the fast-growing digital infrastructure market. WAM said that if the initial contract value awarded is extrapolated across the remaining pipeline, it "implies a substantial runway exists with JLE Group".

Tasmea Ltd (ASX: TEA)

The other ASX share that the fund manager highlighted from the WAM Capital portfolio was Tasmea, which operates a portfolio of trade-skilled services businesses, including electrical, mechanical, civil and water (and fluids) services.

In December, the company announced that it had completed the acquisition of WorkPac Group, a leading provider of workforce solutions in Australia.

WAM noted the deal adds to the ASX share's earnings in the high single digits, with a number of long-term benefits including revenue and cost synergies that will "support multi-year earnings growth".

Despite that positive, the Tasmea share price fell alongside the broader market – the ASX share declined 12%. WAM believes this drop was because of some concerns that this acquisition was "off strategy".

The fund manager thinks that the market is underestimating emerging pressures within the east coast labour market, with the WorkPac Group acquisition "positioning the company strongly to capitalise on an expected surge in activity associated with the Brisbane Olympics. WAM also said that the broader commodity price backdrop remains "supportive for demand" within its core verticals.

The post 2 ASX shares these experts rate as a buy right now appeared first on The Motley Fool Australia.

The business provides utilities businesses and airport companies with enterprise software for billing, customer and operations management.

Some of its customers include EnergyAustralia, Red Energy, Hunter Water, Vocus, Amber, Utility Warehouse, Cleveland Airport, Brisbane Airport, London Gatwick, Manchester Airport, JFK Airport, Edinburgh Airport, Sydney Airport, Melbourne Airport, Seattle-Tacoma Airport and Launceston Airport.

Fund manager Wilson Asset Management is excited about the potential of Gentrack, with the ASX tech stock being a position in the portfolio of WAM Capital Ltd (ASX: WAM).

WAM Capital is a listed investment company (LIC) that targets "the most compelling undervalued growth opportunities in the Australian market". Let's take a look at why WAM is optimistic about the technology company.

WAM's bullish case on Gentrack shares

The fund manager pointed out that the Gentrack share price rose in November (by around 20%), after the release of the company's FY25 result, with revenue climbing 8% to NZ$230.2 million.

Profitability significantly improved at the ASX tech stock with operating profit (EBITDA) going up by approximately 18% and statutory net profit after tax (NPAT) increasing by 119% year-over-year.

Wilson Asset Management explained that this growth was underpinned by "solid demand" across both the utilities and airports segments.

Utilities total revenue grew 7% to $193.4 million with recurring revenue climbing by 12% thanks to wins and upgrades from prior periods turning into recurring revenue.

Veovo (airports) revenue jumped 15% to $36.8 million, driven by new customer wins in the prior year in the UK and the Middle East, as well as upgrades in the Asia Pacific region. Recurring revenue rose 18% year over year, while project work grew 13% compared to the prior corresponding period.

Strong outlook

The fund manager highlighted that the key focus for investors was new disclosure on the customer pipeline, providing "greater visibility on the number, scale and maturity of the opportunities being progressed."

WAM believes the above potential implies the ASX tech stock could more than double its existing recurring utilities revenue over time, setting a baseline for more than 8% revenue growth in FY26 (excluding new-logo wins) and an acceleration to more than 15% growth in FY27.

Wilson Asset Management also believes that operating leverage is expected to continue to drive profit margin expansion for the business.

Finally, the fund manager noted that the company recently hosted an investor day which highlighted "strong advances in the technology stack and importantly sees the g2.0 product suite now being available to new and existing customers."

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That's exactly what is on display right now from WAM Capital Ltd (ASX: WAM).

WAM Capital is a listed investment company (LIC) that has been around for more than 25 years. Like most LICs, it holds a portfolio of underlying shares that it owns and manages on behalf of its investors.

In WAM's case, this portfolio usually consists of small to mid-cap ASX shares which WAM's team views as undervalued, or else poised to benefit from some kind of pricing catalyst. When the value rises, or the catalyst is realised, the shares are often sold, and the profits banked, ready to be passed on to investors through franked dividends. 

Over the past 12 months, WAM Capital shares have paid out two dividends, both worth 7.75 cents per share. That annual total of 15.5 cents per share is the level of income that this company has paid out for eight years now. 

These dividends used to come fully franked, but WAM Capital has lost the ability to fund full franking credits in recent years, with 2025's two payments coming partially franked to 60%. 

Even so, at the current WAM Capital share price of $1.79, the company trades on a trailing yield of 8.67% today.

However, I think there's reasonable cause to believe that this popular ASX income stock could be a dividend trap.

How might this popular ASX income stock be a dividend trap for investors?

A dividend trap is the dreaded term used to describe an income stock that seemingly promises a high level of payouts, only to rob investors of capital down the road by either dropping significantly in value or cutting its dividends (or both).

The first red flag comes from WAM Capital's profit reserve. At the end of October, WAM reported that it had just 21.1 cents per share left in its profit reserve. That's not enough to cover its annual dividend for longer than one year. If the company has a tough 2026, that reserve could fall even further.

Secondly, WAM Capital's actual share price performance has been horrendous. At $1.79 today, the company is trading almost 30% lower than it was in early 2017. Furthermore, you could have purchased this company's shares at the same price they are currently going for today as far back as 2006. That's two decades of zero capital growth, and an awfully long time to tread water.

All the while, the company is taking hefty management fees worth at least 1% per annum from its investors.

Putting all of this together, I believe there are numerous cheaper and lower-risk shares that income investors can opt for instead of WAM Capital at present. Even a simple ASX 200 index fund would have been a better investment than this LIC over the past ten years.

The post Why this popular 8.7% income stock could be a dividend trap appeared first on The Motley Fool Australia.