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Highlights

  • PL8 pays fully franked dividends monthly, a rarity among ASX-listed funds.
  • Current annualised yield is approximately 4.65% based on market price.
  • Policy risk around franking credits remains a key factor for dividend-focused individuals.

Plato Income Maximiser Limited (ASX: PL8), commonly referred to as PL8, is a listed investment company (LIC) on the Australian Securities Exchange that has built its identity on delivering consistent, fully franked dividends to its shareholders. Unlike many equity funds that focus on capital growth as their primary investment objective, PL8 was designed with income maximisation at its core. The company is managed by Plato Investment Management Limited, a specialist boutique fund manager well known for its focus on after-tax income strategies. Dividends are the primary attraction for PL8. Since its listing in May 2017, PL8 has distinguished itself as one of the few Australian-listed funds to pay monthly fully franked dividends.

Dividend Rate and Frequency

  • PL8 pays monthly dividends, a feature that provides frequent cash flow to its investors.
  • The most recent payments have been A$0.0055 per share per month, fully franked (i.e. franking level of 100%).

Yield & Coverage

  • The annual dividend (sum of monthly dividends) is approximately A$0.066 per share, resulting in a current yield of about 4.65% based on prevailing market price.
  • PL8’s dividends are fully franked – meaning the dividends come with franking credits reflecting tax already paid at the corporate level, which benefit shareholders (depending on their tax status).
  • The payout ratio is cited around 59% of earnings in recent periods, indicating that PL8 distributes a sizeable portion, but not all, of its earnings as dividends.

Dividend Risks
While PL8’s earnings coverage is generally sound given its payout ratio, analysts note that cash flow coverage has occasionally been weaker than reported earnings, suggesting reliance on non-cash or accrual items to sustain dividends. Additionally, the fully franked nature of PL8’s distributions, while attractive to retirees and SMSFs, exposes investors to potential policy risk, any future changes to franking credit or imputation rules could reduce the after-tax benefit of these payments.