Sandon Capital’s 1.4 Cent Dividend Yields 8.8% Including Franking Credits

• 1.4 cents per share fully franked dividend declared for September quarter
• Annualised dividend yield of 6.6%, rising to 8.8% including franking credits
• FY2025 gross portfolio returns reached an impressive 28.0%
• Significant profit reserves and franking credits support dividend sustainability
• Dividend Reinvestment Plan available with no discount

Dividend Announcement and Yield

Sandon Capital Investments Limited (ASX, SNC) has declared a fully franked dividend of 1.4 cents per share for the September quarter, payable on 5 September 2025. This dividend translates to an annualised rate of 5.6 cents per share, offering investors a compelling yield of 6.6%, or 8.8% when factoring in franking credits. The company’s Dividend Reinvestment Plan (DRP) will be available without any discount, with director-related entities expected to participate to varying degrees.

Strong FY2025 Investment Performance

The dividend announcement follows a notably strong financial year for Sandon Capital, with gross portfolio returns of 28.0% reported for FY2025. This performance outpaced key market indices, including the Small Ordinaries Accumulation Index at 13.2% and the All Ordinaries Accumulation Index at 12.3%. These returns are reported after management fees but before performance fees, corporate expenses, interest, and taxes, underscoring the company’s effective investment strategy.

Financial Health and Dividend Sustainability

Sandon Capital’s balance sheet remains robust, with profit reserves totaling 40.8 cents per share as of 30 June 2025 and a franking credit balance of 7.5 cents per share. The company has the capacity to pay fully franked dividends amounting to 22.5 cents per share, equating to more than four years of dividends at the current annualised rate. This financial strength provides a solid foundation for ongoing dividend payments, subject to board discretion and prudent financial management.

Looking Ahead

Investors will be watching closely how Sandon Capital navigates the balance between rewarding shareholders and maintaining capital for future growth. The DRP’s no-discount feature may encourage reinvestment, supporting the company’s capital base. While dividends are not guaranteed and remain at the board’s discretion, the current financial indicators suggest a positive outlook for income-focused investors seeking yield in a competitive market environment.

Bottom Line?

Sandon Capital’s strong returns and ample reserves set the stage for sustained dividends, but investors should watch for future board decisions.

Questions in the middle?

• Will Sandon Capital maintain or increase its dividend payout in the coming quarters?
• How will market conditions impact the company’s portfolio returns beyond FY2025?
• What level of participation will director-related entities have in the Dividend Reinvestment Plan?