LIC dividend coverage

Claire Aitchison

Independent Investment Research

With reporting season well and truly behind us, we thought we’d take a look at the state of LIC balance sheets as it pertains to dividend coverage. The company structure of LICs allows companies to retain earnings and regulate the payment of dividends in any given year. 

With an estimated overall 25% decrease in dividends paid by ASX companies over 2020 it is unsurprising that in 1H’FY21 most equity reliant LICs paid out more in dividends than they reported as Net Profit, thereby creating payout ratios greater than 100%.

Source: Supplied. IRESS.

In the attached report, we take a look at how many years the LICs, in each of the respective categories, could maintain current dividend levels given the latest reported retained earnings/profit reserve. 

........
The views here are not recommendations and should not be considered as investment advice.

1 topic

Claire Aitchison
Head of Equities & Funds Research
Independent Investment Research
I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.

Comments

Sign In or Join Free to comment