Best Dividend Stocks ASX Lens: WAM Capital (ASX:WAM) Sets 8c FY27 Dividend Target as Profits Reserve Thins

Sonal Goyal

11 November 2026 09:38 PM AEDT

Best Dividend Stocks ASX Lens: WAM Capital (ASX:WAM) Sets 8c FY27 Dividend Target as Profits Reserve Thins

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Key Highlights

WAM Capital has set an FY27 Dividend target of 8.0 cents per share, down from 15.5 cents in FY26.
The portfolio fell 10.5% in FY26, with a loss after tax of $125.9 million.
The 7.75 cent final dividend was 60% franked and paid on 21 October 2026.
The profits reserve fell to 5.6 cents per share after the final dividend.

WAM Capital Limited (ASX:WAM) has set a dividend target of 8.0 cents per share for FY27, down from the 15.5 cents per share it paid for FY26, after a year in which its Investment portfolio fell 10.5%. The listed investment company paid its 7.75 cent final dividend, 60% franked, on 21 October 2026. For readers researching the best dividend stocks ASX investors use for income, the FY26 Annual Report released on 28 August 2026 shows how a profits reserve, rather than a single year's earnings, decides how much a listed investment company can pay, and what happens when that reserve runs low.

The FY26 Dividends and Timetable

WAM Capital paid two dividends of 7.75 cents per share for FY26, for a full-year total of 15.5 cents per share. Both were 60% franked at the 30% corporate tax rate. The interim was paid on 29 May 2026, totalling $87,728,978 across the share register.

For the final dividend, the shares went ex-dividend on 8 October 2026, the Record Date was 9 October 2026, the last date for Dividend reinvestment plan elections was 13 October 2026 and payment was made on 21 October 2026. The reinvestment plan operated at a 2.5% discount to the Volume weighted average price over the four trading days from the ex-dividend date, with shares rounded down.

The annual report states that dividends paid during FY26, including franking credits, totalled $220,016,634.

Why the Dividend Target Has Been Reset

The reset follows the portfolio result. WAM Capital's investment portfolio fell 10.5% in FY26, before fees, expenses and taxes, compared with gains of 5.7% for the S&P/ASX All Ordinaries Accumulation index and 8.1% for the Small Ordinaries index. The company reported a loss before tax of $186.7 million and a loss after tax of $125.9 million, after an income tax benefit of $60.8 million. Pre-tax net tangible assets fell 11.4% over the year to $1.22 per share.

A listed investment company pays dividends from its profits reserve, which is built up from gains in earlier years. After the FY26 final dividend, WAM Capital's profits reserve stood at 5.6 cents per share. That is below the 7.75 cents that would be needed to pay another Interim Dividend at the FY26 rate. The company added that, based on performance to 27 August 2026, the reserve was expected to rise by about 1.3 cents, giving roughly 6.9 cents available for future dividends.

With that reserve level, the Board set an FY27 target of 8.0 cents per share, made up of a 4.0 cent interim and a 4.0 cent final. If achieved, those dividends are expected to be 60% franked. The annual report states that "The FY2027 dividend target is not a forecast or commitment."

Dividend Policy and the Reserve Trade-Off

WAM Capital's Board aims to pay consistent dividends where the profits reserve allows. The annual report explains that dividends paid in excess of current profits draw on historical reserves, and that this reduces net tangible assets over time.

That trade-off is central to how listed investment companies manage income. Keeping a dividend steady through a weak period protects the payment stream, but it also reduces the reserve available for later years and lowers the asset backing per share. Cutting the dividend preserves the reserve but reduces income. WAM Capital's FY27 target sits between those choices, with the planned 8.0 cents above the 6.9 cents the company expected to have available, implying the target relies on further portfolio gains during the year.

The company reported that it has paid nearly $2.3 billion in dividends since inception, or 478.0 cents per share including franking credits.

Understanding 60% Franking

A 60% Franked Dividend means franking credits are attached to 60% of the cash amount, with the remaining 40% unfranked. On a 7.75 cent dividend, 4.65 cents is franked and 3.10 cents is unfranked. At the 30% tax rate, the franking Credit on the franked portion is about 1.99 cents, giving a grossed-up value of roughly 9.74 cents per share.

The franking level depends on how much tax the company has paid on realised gains and income. A portfolio that has had a weak year may generate less taxable income, which can limit franking credits available for later dividends. WAM Capital has indicated that it expects to maintain 60% franking on the FY27 target dividends.

Management and Next Reporting Date

WAM Capital is chaired by Geoff Wilson AO, with Oscar Oberg as Lead Portfolio Manager. The portfolio is managed by Wilson Asset Management (International) Pty Limited and invests in Australian listed companies. The board includes independent directors Dr Philippa Ryan, James Chirnside, Matthew Pancino and Angus Barker, alongside non-independent directors Geoff Wilson AO and Kate Thorley.

The next dividend decision is expected with the half-year result for the six months to 31 December 2026. That result will show whether the profits reserve has grown enough to support the targeted 4.0 cent interim, and how the portfolio has performed since the end of FY26. Monthly net Tangible Asset updates published by the company in the meantime provide a running indication of portfolio performance.

Key Takeaways

WAM Capital paid a 7.75 cent final dividend, 60% franked, on 21 October 2026, following an ex-dividend date of 8 October. Total FY26 dividends were 15.5 cents per share. The FY26 portfolio fell 10.5%, the company reported a loss after tax of $125.9 million, and the profits reserve fell to 5.6 cents per share after the final dividend.

The Board has set an FY27 target of 8.0 cents per share, split evenly between the interim and final and expected to be 60% franked, while stating that the target is not a forecast or commitment. The example shows that dividend consistency at a listed investment company depends on the size of its profits reserve and its franking balance, and the December half-year result will be the next point at which those numbers are updated.

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