Hoping to bag the latest AFIC dividend? You’d better hurry

The Australian Foundation Investment Co Ltd (ASX: AFI), or AFIC, dividend is soon going to be allocated to shareholders. The listed investment company (LIC) recently released its FY23 result and told investors all about the passive income that’s headed their way.

As the largest LIC on the ASX, investors are also going to become entitled to one of the larger dividend payments in Australia.

AFIC dividend details

The LIC declared a FY23 final dividend of 14 cents, which was the same payment as 12 months ago.

It has an ex-dividend date of 11 August 2023, so today – 10 August 2023 – is the last day for investors to gain entitlement to this upcoming payment. Investors need to own shares before 11 August 2023 to be entitled to the payment.

When will the dividend be paid? AFIC is going to pay the upcoming final FY23 dividend on 1 September 2023, so that’s less than a month away.

If investors want to utilise the dividend re-investment plan (DRP), they need to have elected to take part by 5pm on 15 August 2023.

Final dividend tax details

I’m not a tax agent, but it’s worth noting the taxation comments by the LIC about the final AFIC dividend for FY23. The company said:

The board has elected to source 7 cents per share of the final dividend from capital gains, on which the group has paid or will pay tax. The amount of this pre-tax attributable gain, equals 10 cents per share. This enables some shareholders to claim a tax deduction in their tax return. Further details will be on the dividend statements.

Was the AFIC dividend higher?

The interim dividend was increased by 10% from 10 cents to 11 cents. That means the business has grown its annual dividend per share from 24 cents to 25 cents, an increase of around 4%.

What is the outlook?

The AFIC dividend can be influenced by the investment returns it makes, so what happens in the ASX share market can be important.

The LIC’s investment team said that medium-term conditions remain unpredictable with a “broad range of potential outcomes.” The economic growth rate and the employment rate “remain sound” despite inflation, higher interest rates and Chinese growth slowing.

With that in mind, AFIC said that share markets have “surprisingly been strong” despite broad-based expectations of a “significant slowing” in many global economies including Australia. It’s focused on the fundamentals of the companies in its investment universe. AFIC has aimed the portfolio at quality companies forecast to deliver an “appropriate mix of income and growth” while taking a long-term and patient approach. AFIC also said that it plans to take advantage of any volatility.