WAM Research Limited reported a robust 22.4% increase in its investment portfolio for FY2025, significantly outperforming key ASX indices, while maintaining a high dividend yield of 8.1%.
- Investment portfolio rose 22.4% in FY2025
- Outperformed S&P/ASX All Ordinaries by 9.2%
- Declared full year dividend of 10.0 cents per share, 60% franked
- Dividend yield stands at 8.1%, grossed-up yield at 10.2%
- Portfolio focused on small-to-medium industrial companies with long-term holdings
Strong Portfolio Performance
WAM Research Limited (ASX – WAX) has announced an impressive 22.4% increase in its investment portfolio for the financial year ending 30 June 2025. This performance notably outpaced the S&P/ASX All Ordinaries Accumulation Index by 9.2% and the S&P/ASX Small Ordinaries Accumulation Index by 10.1%, underscoring the effectiveness of its research-driven investment approach.
Dividend Maintained Amid Market Gains
Reflecting the strong portfolio returns, the company declared a full year dividend of 10.0 cents per share, with the final dividend partially franked at 60%. This translates to a high dividend yield of 8.1%, or 10.2% when including franking credits, providing shareholders with a compelling income stream. The dividend reinvestment plan remains active, offering shareholders a 2.5% discount on new shares issued.
Investment Strategy and Portfolio Composition
WAM Research’s portfolio is diversified across sectors, with a strong emphasis on small-to-medium sized industrial companies listed on the ASX. The portfolio’s top holdings include companies such as Tuas Limited, Maas Group Holdings, and Generation Development Group, which have benefited from the team’s long-term conviction and catalyst-driven stock selection. The average holding period is approximately 1.4 years, reflecting a patient investment style focused on identifying re-rating opportunities.
Outlook and Market Environment
Lead Portfolio Manager Oscar Oberg expressed optimism about the small-cap sector’s prospects in FY2026, highlighting the favourable environment and the team’s confidence in their research process. The company’s LIC structure and profits reserve underpin the sustainability of dividends, though future franking levels will depend on tax payments and dividends received from investee companies.
Long-Term Shareholder Returns
Since inception, WAM Research has delivered 159.0 cents per share in franked dividends, or 223.7 cents including franking credits. The total shareholder return for the past year was 12.6%, rising to 15.1% when accounting for franking credits, reinforcing the company’s track record of delivering both income and capital growth within acceptable risk parameters.
Bottom Line?
WAM Research’s sustained outperformance and strong dividend policy position it well for continued success, though future franking levels warrant close attention.
Questions in the middle?
- How will changes in tax payments and investee dividends affect future franking credits?
- What catalysts are expected to drive re-rating in the portfolio’s key holdings?
- How might evolving small-cap market conditions impact WAM Research’s investment strategy?