You said "I do not see much difference between franked or otherwise, paying taxes now or later" Makes a very big difference. Take 2 scenarios (assuming investor is Australian on 37% tax rate + 2% medicare levy:
(1) 70c dividend that is fully franked (@30c). Investor declares $1 of income and is liable to pay tax of 39c (but has paid 30c via franking, so pays an additional 9c). Net cash in hand = 61c.
(2) 70c dividend that is unfranked Investor declares 70c of income and pays 27.3c in tax (39% on 70c ) Net cash in hand = 42.7
Difference is 43% ... that is quite substantial.
If you are lucky enough to be in pension mode in an SMSF (zero tax), then the difference is 30c. (1) Franked means investor gets $1 (70c from NHC and 30c from ATO) (2) Unfranked means investor just get 70c from NHC
NHC Price at posting:
$3.65 Sentiment: Hold Disclosure: Held
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