Why Is Sandon Capital Moving to Monthly Dividends with a Slight Yield Boost?
Sandon Capital Investments has announced a modest increase in its annual dividend and will begin paying fully franked dividends monthly, aiming to provide shareholders with more frequent income amid a changing economic backdrop.
- Annualised dividend increased from 5.6 to 5.64 cents per share
- Monthly fully franked dividends starting October 2025 at 0.47 cents per share
- Annualised dividend yield of approximately 6.3%, rising to 8.5% including franking credits
- Strong profit reserves and franking balance support dividend payments
- Future dividends remain at directors’ discretion and are not guaranteed
A New Dividend Rhythm
Sandon Capital Investments Limited (ASX, SNC) is shaking up its dividend policy by moving from quarterly to monthly payments, coupled with a slight increase in its annualised dividend rate. Starting October 2025, shareholders will receive fully franked dividends of 0.47 cents per share each month, equating to an annualised dividend of 5.64 cents per share; a modest 0.7% increase over the previous rate.
Rewarding Shareholders Amid Economic Shifts
This change comes on the back of a strong 26.9% total shareholder return for the 2025 financial year, as reported in SNC’s recent annual report. The board’s decision reflects a desire to reward investors more regularly, especially as many Australians face ongoing cost-of-living pressures and traditional bank deposit returns decline with falling official interest rates.
By providing monthly dividends, Sandon Capital aims to offer shareholders a steadier income stream, which could be particularly appealing in the current low-rate environment. The fully franked nature of these dividends adds further value, effectively increasing the yield to approximately 8.5% when accounting for franking credits.
Financial Strength Underpinning Dividends
SNC’s financial position supports this dividend strategy. As of 31 July 2025, the company holds profit reserves of 42.7 cents per share and a franking balance of 7.5 cents per share. This robust buffer means the company could theoretically sustain fully franked dividends at the new rate for around four years without additional profits, providing a cushion for shareholders.
However, the board has been clear that future dividends beyond December 2025 are not guaranteed. Each quarter, directors will reassess the company’s financial health and market conditions before declaring dividends, maintaining flexibility in an uncertain economic landscape.
Market Implications and Investor Considerations
Sandon Capital’s move to monthly dividends is relatively uncommon among ASX-listed investment trusts and may set a precedent for others seeking to enhance shareholder engagement and income regularity. Investors attracted to steady cash flows might find this approach particularly compelling, especially given the attractive yield and franking benefits.
That said, the slight increase in dividend rate is modest, suggesting the company is balancing rewarding shareholders with prudent capital management. The discretionary nature of future dividends also signals that investors should monitor SNC’s ongoing performance and dividend announcements closely.
Bottom Line?
Sandon Capital’s monthly dividend shift offers steady income now, but investors should watch closely for future dividend signals.
Questions in the middle?
- Will Sandon Capital maintain monthly dividends beyond December 2025?
- How will market conditions and profit reserves influence future dividend decisions?
- Could this monthly dividend model influence other ASX investment trusts?
