Which WAM stock to buy?, page-7

I currently hold a significant number of shares in WAM, WMI & WLE.

I topped up my WMI on Friday @ $1.355 as I could not resist a bargain.

Markets tend to look anything up to 12 months ahead & it is likely by then that interest rates will have reversed their upward trend.

The reason I currently prefer WMI to WAM is the differential in the profit reserve. WAM has 6.5c & WMI 47.4c.

I believe WAM will struggle to maintain its 7.75c fully franked dividend & the share price will stagnate. Meanwhile WMI, as a result of its profit reserve, should be able to maintain its 5c dividend.

Looking further down the track, I believe WMI has greater potential to increase its dividend. WAM has a significantly higher number of shares on issue than WMI & needs to make more money than WMI to maintain its dividend.

The WAM portfolio holds larger cap stocks than WMI & the larger caps will probably initially outperform the microcaps but the microcaps have been sold off to a greater extent than the midcaps. Consequently, the microcaps have a greater potential to outperform the midcaps once we are well into the next bull market.