Key Highlights

  • WAM Research delivered 13.6 per cent annualised investment portfolio performance since its strategy change in July 2010, outperforming the S&P/ASX All Ordinaries Accumulation Index at 9.4 per cent.
  • The annualised interim dividend is 5.0 cents per share, partially franked at 60 per cent, yielding 8.4 per cent based on the A$1.185 share price.
  • NTA per share before tax was 90.01 cents in February 2026, down from 97.47 cents in January 2026.
  • Total assets stand at A$187.9 million, with dividends of 164.0 cents per share paid since inception and 230.0 cents including franking credits.
  • Top 20 holdings include Aussie Broadband, GemLife Communities Group, Tuas, Service Stream, and FINEOS Corporation among others.

WAM Research Limited (ASX:WAX) remains one of the most popular Listed Investment Companies (LICs) on the Australian Securities Exchange (ASX), attracting income-focused investors with its strong dividend track record and research-driven investment approach. Managed by Wilson Asset Management, the fund targets undervalued growth opportunities in the Australian market.

The February 2026 investment update reveals a portfolio that decreased during the month, with NTA per share declining from 97.47 cents to 90.01 cents. Despite this short-term pullback, WAX continues to deliver a compelling annualised dividend yield of 8.4 per cent and has generated 13.6 per cent annualised portfolio performance since its strategy change in 2010.

For investors searching for WAM Research stock analysis, this article examines the fund’s latest performance, portfolio positioning, dividend sustainability, and the investment case for WAX in 2026.

About WAM Research

WAM Research Limited is a Listed Investment Company managed by Wilson Asset Management (WAM), a firm with over 28 years of experience and more than A$6.0 billion in funds under management across nine listed investment companies and three unlisted funds. WAM serves over 130,000 retail and wholesale investors.

The fund’s investment objective is to identify the most compelling undervalued growth opportunities in the Australian market. WAM Research focuses primarily on small to medium capitalisation companies listed on the ASX, seeking stocks where the market has mispriced the company’s growth potential.

Wilson Asset Management employs a research-driven investment process with four stages: Screen (investment universe for value and growth), Rate (qualitative management, industry and position analysis), Buy (quantitative forecast EPS growth valuation when a catalyst is identified), and Sell (when valuation is reached). This systematic approach is led by Chairman and Chief Investment Officer Geoff Wilson AO.

Why WAX Stock Is in Focus

The February 2026 investment update shows the WAM Research portfolio decreased during the month. NTA per share before tax fell from 97.47 cents in January to 90.01 cents in February, reflecting market headwinds in the small and mid-cap segments of the ASX.

Among the key portfolio contributors, Land Lease Community owner-operator GemLife Communities Group (ASX:GLF) was highlighted as a positive performer. GemLife reported strong FY2025 results exceeding prospectus forecasts, with positive capital management initiatives including debt refinancing. The share price trended upward throughout February.

On the detractor side, Web Travel Group (ASX:WEB) weighed on performance after the Spanish Tax Agency announced a tax audit of the company’s Spanish subsidiary. This news led to a material share price decline, although Web Travel Group subsequently provided reassuring guidance for FY2027.

The board declared an interim dividend of 5.0 cents per share, partially franked at 60 per cent, payable on 28 May 2026. This maintains WAX’s strong dividend track record.

Portfolio Composition and Top Holdings

WAM Research’s top 20 holdings as of February 2026 demonstrate a diversified approach across sectors and market capitalisations. Key holdings include Aussie Broadband (ABB), Autosports Group (ASG), Artrya (AYA), Beacon Lighting Group (BLX), Cuscal (CCL), Energy One (EOL), EVT (EVT), Fletcher Building (FBU), FINEOS Corporation Holdings (FCL), and Generation Development Group (GDG).

The second half of the top 20 includes GemLife Communities Group (GLF), Gentrack Group (GTK), Integral Diagnostics (IDX), Judo Capital Holdings (JDO), Maas Group Holdings (MGH), Nufarm (NUF), Regis Healthcare (REG), Ridley Corporation (RIC), Service Stream (SSM), and Tuas (TUA).

The sector allocation shows a diversified portfolio: Industrials 19.8 per cent, Financials 13.9 per cent, Communication Services 13.4 per cent, Information Technology 13.2 per cent, Consumer Discretionary 12.1 per cent, Health Care 8.8 per cent, Real Estate 5.6 per cent, Materials 3.4 per cent, Consumer Staples 2.7 per cent, Utilities 1.8 per cent, and Cash 5.3 per cent.

By market capitalisation, 57.7 per cent of the portfolio sits in the ASX 101–300 range, 35.6 per cent is outside the ASX 300, 1.4 per cent in the ASX 51–100, and 0 per cent in the ASX Top 50. This confirms the fund’s small to mid-cap focus.

Financial Performance and Dividend Track Record

WAM Research has delivered annualised investment portfolio performance of 13.6 per cent per annum since its change in investment strategy in July 2010, compared to 9.4 per cent for the S&P/ASX All Ordinaries Accumulation Index over the same period. This outperformance of 4.2 percentage points per annum demonstrates the value added by the active management approach.

The fund has paid total dividends of 164.0 cents per share since inception, which rises to 230.0 cents per share when including the value of franking credits. The annualised interim dividend of 5.0 cents per share yields 8.4 per cent based on the 27 February share price of A$1.185, with a grossed-up dividend yield of 10.6 per cent.

Profits reserve per share stands at 46.8 cents, providing a buffer to sustain dividend payments even through periods of market weakness. However, the dividend payout ratio of 118.34 per cent indicates the fund is currently distributing more than its earnings, which could be unsustainable if market conditions deteriorate further.

Total assets are A$187.9 million, with the month-end share price at A$1.185 as of 27 February 2026.

Investment Risks

Market risk is the primary concern, as WAX holds a portfolio of small to mid-cap equities that tend to exhibit higher volatility than large-cap stocks. Periods of market stress often disproportionately impact smaller companies, which can lead to NTA declines.

Discount to NTA risk is a persistent feature of LICs. WAX currently trades at a premium to its NTA (share price A$1.185 versus NTA of 90.01 cents), which is unusual and reflects the market’s willingness to pay for WAM’s management and dividend reliability. This premium could narrow or reverse during market downturns.

Dividend sustainability risk exists given the payout ratio exceeds 100 per cent. While the 46.8 cents per share profits reserve provides a buffer, sustained underperformance could eventually require dividend reductions.

Small-cap concentration risk means the portfolio is exposed to less liquid stocks with thinner trading volumes, which can amplify price movements during market stress.

Future Growth Drivers

The research-driven approach positions WAM Research to benefit from continued identification of undervalued growth opportunities. The small-cap segment of the ASX has historically been fertile ground for stock picking, as analyst coverage is thinner and pricing inefficiencies persist.

Wilson Asset Management’s expanding platform with over A$6 billion in funds under management provides research resources and market intelligence that can benefit WAX’s investment outcomes.

Key holdings in growth sectors including communication services, information technology, and health care provide exposure to structural growth themes. Positions in companies like Tuas, FINEOS Corporation, and Gentrack Group reflect exposure to technology-driven transformation stories.

The fund’s upcoming FY2026 Interim Results Q&A Webinar, scheduled for 13 March 2026, will provide further insight into the investment team’s positioning and market outlook.

Long-Term Investment Perspective

WAM Research has established itself as one of Australia’s premier small-cap LICs, with a track record of outperformance and consistent dividend payments spanning more than two decades. The long-term investment case rests on the sustainability of this research-driven approach and the ability to continue identifying undervalued growth stocks.

For income-focused investors, the 8.4per cent annualised dividend yield (10.6 per cent grossed-up) is highly attractive in the current environment, and the profits reserve provides comfort regarding near-term dividend sustainability.

Is WAM Research a good investment in 2026? The WAX stock analysis suggests a well-managed LIC with a proven track record, attractive yield, and experienced management. The key consideration is whether the premium to NTA is justified and whether small-cap market conditions will support portfolio recovery from the February decline.

Conclusion

WAM Research continues to deliver on its core proposition of undervalued small-cap growth investing with attractive income distributions. Despite the February 2026 NTA decline, the fund’s long-term track record of 13.6 per cent annualised returns and consistent dividend payments make it a compelling option for income-focused investors.

Investors evaluating WAX stock analysis should consider the balance between the attractive yield, proven management, and the risks associated with the premium to NTA and small-cap market conditions. The upcoming interim results webinar on 13 March will provide further visibility into the investment team’s outlook and positioning for the remainder of FY2026.

 

Questions Investors Are Asking About WAM Research

Q: What dividend does WAM Research pay?

A: WAX pays an annualised interim dividend of 5.0 cents per share, partially franked at 60 per cent. Based on the A$1.185 share price, this yields 8.4 per cent (10.6 per cent grossed-up). The interim dividend of 5.0 cents per share is payable on 28 May 2026.

Q: What is WAM Research’s NTA?

A: NTA per share before tax was 90.01 cents in February 2026, down from 97.47 cents in January. The net current and deferred tax position is 5.56 cents per share, including 3.00 cents of tax losses available.

Q: What stocks does WAM Research hold?

A: Top holdings include Aussie Broadband, GemLife Communities Group, Tuas, Service Stream, FINEOS Corporation, Nufarm, and Regis Healthcare among 20 key positions, diversified across industrials, financials, technology, and other sectors.

Q: How has WAM Research performed historically?

A: Since its strategy change in July 2010, WAX has delivered 13.6 per cent annualised portfolio performance, outperforming the S&P/ASX All Ordinaries Accumulation Index at 9.4 per cent by 4.2 percentage points per annum.

Q: Who manages WAM Research?

A: WAX is managed by Wilson Asset Management, led by Chairman and Chief Investment Officer Geoff Wilson AO, CEO Kate Thorley, and CFO Jesse Hamilton. WAM has over A$6 billion in funds under management.

Q: Is WAX trading at a premium or discount to NTA?

A: WAX currently trades at a significant premium to NTA (A$1.185 share price vs 90.01 cents NTA), reflecting the market’s valuation of WAM’s management expertise and the fund’s dividend track record.

Q: What sectors does WAM Research invest in?

A: The portfolio is diversified with major allocations to Industrials (19.8%), Financials (13.9%), Communication Services (13.4%), Information Technology (13.2%), Consumer Discretionary (12.1%), and Health Care (8.8%).

Q: Is WAM Research suitable for income investors?

A: Yes, WAX is designed for income-focused investors seeking franked dividends from Australian equities. The 8.4per cent yield and 46.8 cents per share profits reserve support the income case.

Q: What are the risks of investing in WAX?

A: Key risks include small-cap market volatility, the premium to NTA that could narrow, a dividend payout ratio above 100 per cent, and exposure to individual stock risks within the concentrated portfolio.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should conduct their own research and consult qualified financial advisors before making investment decisions. Past performance is not indicative of future results.