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.

The post Thinking of buying WAM Capital shares for the 9% dividend yield? Read this first appeared first on The Motley Fool Australia.

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

The post WAM Capital earnings: Dividend steady as half-year profit falls appeared first on The Motley Fool Australia.

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."

The post A fund manager really likes this exciting ASX tech stock! appeared first on The Motley Fool Australia.

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.

Fund manager Wilson Asset Management is always on the lookout for opportunities that could outperform for one of the portfolios of the listed investment companies (LICs) that it operates. WAM Capital Ltd (ASX: WAM) looks for the most compelling undervalued growth opportunities in the Australian market.

Two of the businesses that WAM has picked out are a specialist engineering and construction services company, and the other is an automotive retail group. Let's dive in.

SRG Global Ltd (ASX: SRG)

WAM described SRG Global is a diversified infrastructure services contractor with exposure across the engineering, construction and maintenance sectors.

The fund manager noted that the SRG Global share price increased after the company announced a confirmed and binding bid to acquire Total AMS (TAMS), a leading marine infrastructure services business, for $85 million.

WAM highlighted that the acquisition was received positively by the market given the complementary marine capability and potential for higher recurring revenue.

The investment team also said that the ASX 300 share's momentum was reinforced by the formal completion of the acquisition at the end of the month, which supported sentiment through October.

WAM finalised its comments on the company with the following:

Longer term, we see the enlarged platform broadening SRG Global's addressable market and strengthening opportunity for growth across resources, energy and public infrastructure.

Eagers Automotive Ltd (ASX: APE)

The other ASX 300 share that WAM highlighted is the leading automotive retail group in Australia and New Zealand.

In October, the company announced a "transformational move" into North America, agreeing to acquire a controlling stake in CanadaOne and funding it through a capital raising that includes Mitsubishi Corporation.

WAM noted that Mitsubishi Corporation also took a 20% stake in Eagers Automotive's easyauto123 business for $70 million. An investor day later in the month outlined the strategic rationale and runway for growth.

The investment team then highlighted why they think Canada is an exciting opportunity for the ASX 300 share, commenting:            

We see Canada's fragmented market, where leading players each have only around 2% market share, as a fertile landscape for expansion, with Eagers Automotive's proven integration playbook a clear advantage. Optionality in easyauto123 is underappreciated and core Australia and New Zealand operations continue to deliver. Overall, we retain high conviction in the company's management quality and multi-year growth path.

The post This fund manager is bullish on these ASX 300 shares appeared first on The Motley Fool Australia.

Most investors would be delighted to receive this kind of return from dividends alone. However, I think this dividend yield is something of a wolf in sheep's clothing.

For one, this LIC charges a hefty management fee of 1% per annum. On top of that, investors are also subject to an additional 20% performance fee.

For another, what WAM Capital shareholders get in dividends, they seem to pay for with their capital. The WAM share price itself has been a dastardly performer in recent years. The company last peaked at over $2.50 a share way back in early 2017. Since then, investors have watched as the WAM Capital share price has lost almost a third of its value.

So rather than opting for the siren song of WAM Capital's high dividend yield, I think ASX income investors would be far better off choosing the BetaShares S&P Australian Shares High Yield ETF (ASX: HYLD).

Why this ASX ETF over WAM Capital's 8% dividend yield?

This exchange-traded fund (ETF) holds an underlying portfolio of ASX dividend shares. These are selected both on their history of paying out hefty income, as well as their likelihood to continue said payments into the future.

Some of HYLD's current holdings include Westpac Banking Corp (ASX: WBC), BHP Group Ltd (ASX: BHP), Wesfarmers Ltd (ASX: WES) and Macquarie Group Ltd (ASX: MQG).

Instead of charging a fee north of 1%, this ETF will only set investors back 0.25% per annum. That fee, which is four times cheaper than WAM Capital's, can make a huge difference over a long period of time.

Additionally, the BetaShares Australian Shares High Yield ETF pays out a dividend every single month. This is a relatively new ETF, with the inaugural dividend due later this month on 16 September.

This inaugural dividend will be worth 11.92 cents per share, which, if annualised, would give the Betashares Australian Shares High Yield ETF a dividend yield of 4.57% at current pricing. No doubt many income investors will appreciate that cash flow regularity.

Sure, this ETF's starting yield is not as chunky as WAM Capital's 8.68%. But I expect HYLD to deliver far higher overall returns than WAM Capital in the future.

The post Don't fall for WAM Capital's 8.7% dividend: Buy this monthly high-yield ETF instead appeared first on The Motley Fool Australia.

Investors clearly liked what the business reported, which we'll get to in a moment.

The company is a leading producer of dairy products that are made with a2 beta-casein protein across infant formula, liquid milk, and other types of powdered milk products.

A2 Milk was one of the positions in the portfolio of WAM Capital Ltd (ASX: WAM), a listed investment company (LIC) focused on the most compelling undervalued growth opportunities in the Australian market.

Let's take a look to see whether the ASX share is an opportunity or not, according to WAM.

Expert views on the A2 Milk share price

The fund manager noted that the company reported record revenue in the FY25 result, an increase of 13.5% year over year.

WAM highlighted that A2 Milk's operating profit (EBITDA) climbed by 17.1% to $274.3 million, and net profit after tax (NPAT) rose by 21.1% to $202.9 million.

The investment team pointed out that the growth was driven by English-label infant formula sales, which were up 17.2% year over year. There was also a strong uplift in US liquid milk sales, which increased by 22.1% year over year.

Despite the shrinking of the Chinese infant formula market, it delivered impressive performance in the country, with its achievement of a record market share. WAM said A2 Milk is reinforcing its brand strength with "exit rates in the second half of FY25 providing a strong indication of momentum into FY26."

Another noteworthy piece of news was that the company is reshaping its supply chain by acquiring a New Zealand nutritional facility and divesting its stake in Mataura Valley Milk. This move reportedly improves integration and flexibility and has significant margin upside over the coming years.

Outlook for the dairy company

Outlining its views on A2 Milk shares, WAM said:

The company remains well placed to capitalise on structural demand for premium dairy products worldwide.

For its continuing operations, in FY26, the company is expecting revenue growth of "high single-digit percent" compared to FY25. The operating profit (EBITDA) margin is projected to be approximately 15% to 16%.

The net profit in FY26 is expected to be similar to the reported net profit of FY25.

A2 Milk is focused on "capturing its full potential in the China market, while expanding into adjacent categories and new markets." It intends to declare a $300 million special dividend, subject to receiving regulatory approvals in connection with the two existing China label registrations and completion of the Mataura Valley Milk divestment.

The company is certainly on a positive trajectory.

The post Is the A2 Milk share price a buy in September? appeared first on The Motley Fool Australia.

The stocks that WAM highlighted were from the portfolio of listed investment company (LIC) WAM Capital Ltd (ASX: WAM), which is focused on finding "the most compelling undervalued growth opportunities in the Australian market."

WAM Capital is one of the largest LICs on the ASX and it's very happy to look across the ASX share market for opportunities. Let's take at two of the ASX 200 shares that WAM highlighted.

ALS Ltd (ASX: ALQ)

WAM described ALS as a global leader in testing inspection, certification and verification services in the commodities and life sciences sectors.

The fund manager pointed out that the company delivered a robust FY26 first quarter update at a recent investor day, reaffirming its guidance of between 5% to 7% of organic revenue growth and profit margin expansion.

WAM noted that strengthening commodity markets and increased miner financing activity are "key tailwinds".

For the fund manager, a key takeaway from the event was the "strategic focus on higher-growth markets, while reinforcing its competitive edge in core segments where it holds dominant market share.

The investment team also pointed out that digitisation and artificial intelligence (AI) were highlighted as medium-term drivers of an uplift of profit margins.

WAM then explained why it's bullish on the ASX 200 share:

ALS is well positioned to leverage a strong balance sheet and execute earnings-accretive acquisitions. We remain constructive on the outlook and see potential upside to consensus earnings, with valuation appearing undemanding at this stage of the cycle.

Hub24 Ltd (ASX: HUB)

WAM said that Hub24 operates a financials services and wealth technology platform delivering integrated investment, super and adviser portals.

Excitingly, the Hub24 share price rose 20% in July, as the below chart shows. The fund manager attributed that rise to strong financial performance and strategic developments, reflecting investor confidence in its growth prospects.

In the FY25 fourth quarter market update, Hub24 reported record annual platform net inflows of $19.8 billion, a 25% year-over-year increase. That growth was driven by net inflows of $5.3 billion in the fourth quarter, including $1.2 billion from EQT Holdings Ltd (ASX: EQT).

The inflows from EQT represent the final tranche of funds migrated as part of a strategic partnership between the two companies.

Excluding those migrations, net inflows for the quarter were a record $4.1 billion, up 33% year-over-year.

Additionally, the company's total funds under administration (FUA) reached $136.4 billion as of 30 June 2025, being a 30% increase from the previous year.

The post A leading fund manager says these 2 ASX 200 shares have exciting potential appeared first on The Motley Fool Australia.

ASX 200 utilities, financials, and consumer discretionary shares dragged the market to its new peak today.

The new record followed a 0.25% interest rate cut announced by the Reserve Bank of Australia in the afternoon.

Several ASX exchange-traded funds (ETFs) tracking the ASX 200 Index also hit record highs today.

They included the SPDR S&P/ASX 200 ETF (ASX: STW), which peaked at $79.83 per unit.

The Betashares Australia 200 ETF (ASX: A200) hit $148 per unit.

The iShares Core S&P/ASX 200 ETF (ASX: IOZ) reached $35.69 per unit.

The rate cut also resulted in a new record high for the S&P/ASX 300 Index (ASX: XKO) at 8,825.5 points.

This sent the biggest Aussie ETF, the Vanguard Australian Shares Index ETF (ASX: VAS), to a new peak of $110.

7 ASX 200 stocks also set records today

A bunch of individual ASX 200 stocks hit new price peaks today.

Here is a sample.

Life360 Inc (ASX: 360)

This ASX 200 technology darling ascended to a record high of $43.34.

Life360 shares surged 8% on Tuesday after the family location app provider released its June quarter report.

The tech share was the fastest riser of the ASX 200 today.

Lynas Rare Earths Ltd (ASX: LYC)

The Lynas share price lifted to a 13-year high of $13.31.

Top broker Macquarie has an underperform rating with a price target of $9 on the ASX 200 rare earths stock.

Charter Hall Group (ASX: CHC)

This ASX 200 real estate investment trust (REIT) lifted to a four-year high of $21.94 today.

Charter Hall was the No. 1 property stock for price growth in FY25.

GPT Group (ASX: GPT)

Another ASX 200 property stock, GPT Group, rose to a three-year high of $5.22 on Tuesday.

Macquarie has an outperform rating on GPT Group shares with a 12-month price target of $5.36.

Deterra Royalties Ltd (ASX: DRR)

Deterra Royalties shares lifted to a 15-month high of $4.49 on Tuesday.

WAM Capital Ltd (ASX: WAM)

This ASX 200 listed investment company (LIC) matched its near two-year high of $1.72, reached last Thursday, today.

WAM Capital released its July investment update today.

IMDEX Ltd (ASX: IMD)

This ASX 200 materials stock rose to a record high of $3.34.

Fund manager L1 Capital has a buy rating on IMDEX shares.

The fundie continues to see "positive tailwinds for the business, above and beyond the improving market environment …".

The post 7 ASX 200 stocks soar to multi-year highs amid new market record appeared first on The Motley Fool Australia.

Haven't heard of this company before? WAM describes SRG as a diversified infrastructure services contractor with exposure across engineering, construction, and maintenance sectors.

The fund manager noted that the SRG Global share price increased 15% in June after announcing pleasing business progress, helping the performance of the listed investment company (LIC) WAM Capital Ltd (ASX: WAM). WAM Capital looks for the most compelling undervalued growth opportunities in the Australian market.  

Let's take a look at why SRG's success is so promising.

Significant contract progress by the ASX small-cap stock

WAM noted that SRG Global announced $850 million contracts with blue-chip repeat clients across water, energy, resources, defence, and data centre projects.

For example, it won a five-year term contract for asset integrity and reliability services with Origin Energy Ltd (ASX: ORG) at its Darling Downs, Eraring, and Shoalhaven power assets across Queensland and New South Wales.

It has also won asset integrity and reliability services term contracts with the BHP Group Ltd (ASX: BHP) iron ore division in the Pilbara region of Western Australia, the BHP copper South Australia assets, the Alcoa Corporation CDI (ASX: AAI) refineries in the southwest of WA, and Anglo American's assets across Australia.

Another ASX share it won a contract with was South32 Ltd (ASX: S32), to provide specialist major shutdown maintenance services across its Worsley operations in southwest WA.

On the infrastructure side of things, the ASX small-cap stock won an engineered products contract for the supply of specialist structural products for the Western Sydney Airport stations project for Sydney Metro.

The final contract I'll point out is a structures contract with Multiplex for the Nextdc Ltd (ASX: NXT) Malaga data centre in Perth.

These wins raised the total contract value (TCV) secured in FY25 to approximately $1.8 billion, more than double the prior year, and support further growth into FY26.

What does WAM like about these contract wins?

Wilson Asset Management said the breadth of the awarded contracts highlighted the ASX small-cap stock's cross-selling capability and client relationships, reinforcing the thesis that the company can compound earnings as governments and corporates continue to invest in critical infrastructure.

The post Why this ASX small-cap stock has significant potential appeared first on The Motley Fool Australia.

There are countless examples of this. It might be Coles Group Ltd (ASX: COL)'s 3.34% yield, Wesfarmers Ltd (ASX: WES)'s 2.43%, Telstra Group Ltd (ASX: TLS)'s 3.83%, or, most infamously, Commonwealth Bank of Australia (ASX: CBA)'s 2.66%.

All of those yields we just listed would have been unthinkable a few years ago. And yet, here we are.

This situation has made hunting for yield far harder than it used to be for income investors.

And yet, there's one popular ASX dividend that hasn't joined the train. That would be listed investment company (LIC) WAM Capital Ltd (ASX: WAM).

WAM Capital has been on the ASX for over 25 years now. Over this period, it has become a top pick for retirees and other income investors thanks to the large dividend yields it routinely sports.

Over the past 12 months, WAM Capital has paid out two dividends, each worth 7.75 cents per share.

At today's price of $1.62, those dividends give the company a trailing yield of 9.51%.

However, in my view, there are a number of red flags that investors should keep in mind before rushing out to secure this dividend yield.

What's wrong with this ASX dividend share's 9.5% yield?

Firstly, WAM Capital is not a good performer. Its shares have lost almost 15% of their value since this time in 2020, and more than 32% since October of 2021.

Secondly, the company charges a not-insubstantial management fee of 1% per annum for its services, as well as a performance fee if it outperforms its ASX benchmark. The company's performance figures don't include this fee, but it is hefty and will detract significantly from returns going forward. In recent years, shareholders have, in effect, been paying for their dividends with their own capital.

Thirdly, WAM Capital currently only has 17.6 cents per share in its profit reserve from which it funds its dividends. That's only enough to keep it current dividend going for one more year. If the company has a bad year, it won't take long for that reserve to be exhausted, which would immediately threaten its 9.5% yield.

Foolish takeaway

When an ASX dividend share trades at such a high yield, it is usually a warning sign that the market is pricing in the risk of a dividend cut. That is likely to be the case for WAM Capital shares today.

As such, I think investors who value receiving dividend income are better off looking elsewhere for their returns right now.

The post This ASX dividend share has a 9.5% yield. Here's why it might be a trap appeared first on The Motley Fool Australia.

Wilson Asset Management recently released its monthly reports for each of its listed investment companies (LICs).

The reports reveal four ASX tech shares impressing Wilson analysts today.

Here is why they're feeling optimistic about these ASX technology stocks.

4 ASX tech shares with a bright outlook: analysts

Life360 Inc (ASX: 360)

In the May update for WAM Active Limited (ASX: WAA), Wilson analysts discussed the location-tracking software company, Life360.

Life360's 1Q FY25 update exceeded consensus estimates across all key metrics, they said.

Earnings increased by 32%, and the company upgraded its FY25 subscription revenue guidance.

The analysts said:

Additionally, Life360 announced a USD25 million investment in artificial intelligence (AI) safety firm Aura, signaling a strategic move to enhance its product offerings and market position.

We believe the market continues to underappreciate the opportunity within Life360's advertising business, whilst still in its infancy, has the capacity to match the size of the subscription business in the medium-term and expand revenue growth.

The Life360 share price closed at $31.95, up 1.17%.

Catapult Group International Ltd (ASX: CAT)

In the May update for WAM Capital Ltd (ASX: WAM), the analysts said this ASX sports tech solutions provider has several tailwinds.

They said:

Catapult Group International is benefitting from strong structural tailwinds and growing demand for data-driven sports analytics.

The company's management aims to grow the annualised contract value 10 times to approximately USD1 billion.

With a clear land-and-expand strategy, global reach and success in cross-selling, we believe this long-term target is achievable and reflects the company's strong competitive position in a growing market.

The Catapult share price closed at $5.79, up 3.58%.

TechnologyOne Ltd (ASX: TNE)

This ASX tech share is Australia's largest enterprise software-as-a-service (SaaS) company.

The TechnologyOne share price reached an all-time high of $42.88 on 6 June.

The WAM Capital analysts were impressed by TechnologyOne's half-year results, including a 31% rise in net profit after tax to $63 million.

The analysts said:

The company's strong financial results, along with its upgraded full-year profit guidance, strengthened investor confidence and contributed to the notable appreciation in its share price.

TechnologyOne shares finished the session at $40.35, down 0.37%.

WiseTech Global Ltd (ASX: WTC)

In the update for WAM Leaders Ltd (ASX: WLE), the analysts noted WiseTech's acquisition of the supply chain software company, e2open.

They said:

Bolt-on acquisitions are core to WiseTech Global's strategy, and this is their largest acquisition yet, with a purchase price of US$2.1 billion. We are supportive of the deal, given both the strategic rationale and that it is financially accretive.

The analysts said Wisetech is their top ASX tech share pick.

The Wisetech share price closed at $107.37, up 0.2%.

The post 4 ASX tech shares impressing analysts today appeared first on The Motley Fool Australia.

Businesses that are growing their revenue at a strong pace give themselves a great chance at delivering share price growth. Rising revenue can help deliver rising profit margins, allowing net profit to rise faster than revenue over time.

The fund manager named two ASX 300 shares in the WAM Capital Ltd (ASX: WAM) portfolio that are succeeding for shareholders.

Catapult Group International Ltd (ASX: CAT)

WAM describes Catapult as a global leader in sports technology solutions for professional teams.

In May, the company announced its results for the financial year ending 31 March 2025. That result showed a 19% year-over-year increase in revenue to $185 million. The ASX tech share also achieved a record high free cash flow of $14 million for the period.

The fund manager explained that Catapult is benefiting from strong structural tailwinds and growing demand for data-driven sports analytics.

Catapult's management is aiming to grow its annualised contract value (ACV) by 10x to approximately US$1 billion.

How likely is the ASX 300 share to be able to reach that target? WAM said:

With a clear land-and-expand strategy, global reach and success in cross-selling, we believe this long-term target is achievable and reflects the company's strong competitive position in a growing market.

TechnologyOne Ltd (ASX: TNE)

The fund manager also highlighted TechnologyOne, Australia's largest software as a service (SaaS) company. The ASX tech share has rocketed higher in the last few months; it's up more than 70% from 7 April 2025, as the chart below shows.

WAM explained that this rise has primarily been driven by the release of a strong half-year result on 20 May 2025, for the period ending 31 March 2025, which beat investor expectations.

The ASX 300 share reported a 19% increase in total revenue to $291.3 million and a 31% rise in net profit after tax (NPAT) to $63 million. On top of that, annual recurring revenue (ARR) grew by 21% to $511.1 million.

WAM then explained why the market is looking at the ASX 300 share in a much more positive light:            

The company's strong financial results, along with its upgraded full-year profit guidance, strengthened investor confidence and contributed to the notable appreciation in its share price.

The post Here's why these two ASX 300 shares are great ones to own appeared first on The Motley Fool Australia.

Looking at WAM Capital shares today, it's not hard to see why. At the present time, shares of this listed investment company (LIC) are trading on a trailing dividend yield of 9.81%.

That comes from the 15.5 cents per share in dividends that WAM Capital has paid out over the past 12 months, coupled with the LIC's share price of $1.58 (at the time of writing).

So that near-10% yield is legitimate, as much as a trailing yield can be, at least. But let's discuss whether buying WAM Capital shares today will result in an investor enjoying a yield of that magnitude going forward.

As a LIC, WAM can only fund dividends for its shareholders in two ways.

Is WAM Capital's 10% dividend yield too good to be true?

The first involves passing on the dividend income that WAM itself receives from its underlying portfolio of ASX dividend shares. WAM Capital invests in a portfolio of small and mid-cap stocks that are selected for their potential as "undervalued growth opportunities" or to realise an upcoming share price 'catalyst'.

Some of WAM's current holdings (as of 30 April) include Megaport Ltd (ASX: MP1), A2 Milk Company Ltd (ASX: A2M), and Life360 Inc (ASX: 360).

The second way WAM can add cash to its profit reserve to fund its dividend payments is by selling a holding that has risen in value, thus cementing a profit on its investment.

The data suggests that this ASX dividend share is struggling to do this at a sustainable level. To illustrate, the company reports that it currently (again, as of 30 April) has 17.1 cents per share in its profit reserve. That's enough for just over one year's dividend payments. If WAM has a bad year, it seems likely that investors might have to brace for a dividend cut.

ASX dividend share loses its franking

Another thing to note is that this ASX dividend share hasn't increased its annual dividend since 2018. Seven years of stagnant income might be one of the reasons why WAM Capital shares have lost more than a quarter of their value since 2021. That means that, while investors have continued to receive a steady dividend since then, their capital base has been eroding from under them. WAM Capital's rather steep management fee of 1% per annum (plus a 20% performance fee) wouldn't be helping that either.

It's also worth pointing out that WAM's ability to dole out franking credits alongside its dividends is diminishing. This could possibly be a result of a lack of sellable portfolio winners. To see this in action, we only need to look at the company's most recent payouts. Until 2024, WAM Capital's payouts had almost always come with full franking credits attached. But since last year, the payments have only come partially franked at 60%.

Foolish Takeaway

It's always difficult to predict what an ASX dividend share might pay going forward. However, when it comes to WAM Capital, there are a few signs that investors could be facing a dividend cut in the future.

As such, investors should keep in mind that buying this LIC at the current pricing does not guarantee that they will receive that near-10% yield. Tread carefully; this could well be a classic case of the dreaded 'dividend trap'.

The post Down 34% since 2021, does this ASX dividend share still offer investors a 10% yield today? appeared first on The Motley Fool Australia.

You've come to the right place.

If you're like me, there's nothing like the sound of dividends hitting your bank account on the heels of your ASX stock holdings' half-year and full-year earnings results.

OK.

There is no sound.

But you get what I mean.

Earning passive income from your investments, while also hopefully watching their share prices push higher, beats the heck out of working longer hours.

Just bear in mind that a properly diversified income portfolio should contain more than just three stocks. There's no magic number. But 10 is a decent ballpark, with the companies ideally operating in various sectors and geographic locations. That will reduce the overall risk to your passive income portfolio if one company or sector hits a rough patch.

And remember that the dividend yields you generally see quoted are trailing yields. Future yields may be higher or lower depending on a range of company-specific or macroeconomic factors.

With that said, here are three high-yielding ASX dividend shares that I believe also have strong potential to deliver capital gains in the year ahead.

Tapping into ASX dividend stocks for passive income

First up, we have dual-listed, New Zealand-based satellite TV provider Sky Network Television Ltd (ASX: SKT).

Over the past 12 months, Sky Network has paid 18.7 cents a share in unfranked dividends, and its share price has increased 5.0%.

At Friday's closing price of $2.46, Sky Network shares trade on an unfranked trailing dividend yield of 7.6%.

As for the passive income and share price outlook, this week, Macquarie Group Ltd (ASX: MQG) called Sky Network "one of the most undervalued stocks". The broker has an outperform rating on the stock, with expectations of a materially higher share price and dividend payments in the year ahead.

The next ASX dividend stock to consider for market-beating passive income is Woodside Energy Group Ltd (ASX: WDS).

Over the past 12 months, the Aussie oil and gas giant has paid out $1.87 a share in fully franked dividends, and the Woodside share price has fallen 22%.

At Friday's closing price of $21.58 a share, Woodside trades on a fully franked trailing dividend yield of 8.7%.

As for the outlook, Simon Mawhinney, chief investment officer at Allan Gray, said earlier this week that he believes "there's an asymmetric skew to the upside" for Woodside shares. "That's one of the reasons it's our largest investment," he noted.

Which brings us to the third-top ASX dividend stock offering market-beating passive income, WAM Capital Limited (ASX: WAM).

Over the past 12 months, the asset manager has paid out 15.6 cents a share in dividends, franked at 60%. The WAM Capital share price has gained 6% over this time.

At Friday's closing price of $1.57 a share, WAM Capital trades on a partly franked trailing dividend yield of 9.9%.

The post 3 top ASX dividend stocks paying market-beating passive income appeared first on The Motley Fool Australia.

And unlike many global markets, like in the United States, a lot of top ASX 200 dividend shares pay franking credits.

That's something to keep an eye on, as these credits can make a material difference to the amount of passive income you get to hold onto when it comes time to pay the ATO.

We'll look at three high-yielding ASX dividend stocks below, two of which come with 100% franking credits and one which offers partly franked dividends.

Just take note that a properly diversified income portfolio will contain more than just three stocks. While there's no magic number, 10 is a decent ballpark figure to aim for.

Also, remember that the yields you generally see quoted are trailing yields. Future yields could be higher or lower depending on a range of company specific and macroeconomic factors.

With that said, here are three ASX 200 shares at the top of my passive income list.

Three high-yielding ASX 200 dividend shares

First up, we have lenders mortgage insurance provider Helia Group Ltd (ASX: HLI).

The ASX 200 dividend share paid a fully franked interim dividend of 15 cents per share. Helia then paid a final ordinary dividend of 16 cents per share and a fully franked special dividend of 53 cents per share on 3 April.

That brings Helia's full year passive income payout to 84 cents per share. The Helia share price is up 28% over a year, closing on Friday at $5.25 a share. This sees Helia trading on a fully franked trailing dividend yield of 16.0%.

Next up we have asset manager WAM Capital Limited (ASX: WAM), which manages a diversified portfolio of income stocks.

Over the past 12 months, WAM has paid two dividends franked at 60% and totalling 15.6 cents per share.

The WAM Capital share price is up 6% in a year, closing on Friday at $1.56 per share. That sees this ASX 200 dividend stock trading on a partly franked trailing yield of 10.0%.

And the third company I'd invest in for passive income is coal miner New Hope Corp Ltd (ASX: NHC).

New Hope's two fully franked dividend payouts over the past year total 41 cents a share.

The New Hope share price is down 17% in a year, closing on Friday trading for $3.90. This sees New Hope trading on a fully franked trailing dividend yield of 10.5%.

How much do I need to invest for $20,000 a year in passive income?

So, how much would I need to invest today to secure $20,000 in passive income from these three ASX 200 dividend stocks (based on their trailing yields)?

Assuming I invest an equal amount in each stock, I'd be eyeing a dividend yield of 12.2%.

So, to be able to sit back and watch $20,000 of passive income roll in each year, I'd need to invest $163,934 today.

Now, for most of us, that's a big chunk of money to invest all in one go.

But that's okay.

Investing is a long game.

I can always invest a smaller amount each month, and I'll reach my income goal in good time.

The post How I'd build a $20,000 annual passive income stream from these top ASX 200 shares appeared first on The Motley Fool Australia.