If the stock market rises, as predicted, WAA will become further invested & the profits made should be in excess of the dividend. You should be able to already pencil in the final dividend for this year of 4.5c as franking credits are available (10.7c per share as at 31st January 2012).
A reasonable rise in the market in 2012/13 should see dividends rise to 5.0c & 5.0c.
WAA has the record of beating the index & future earnings should outstrip the dividend.
What makes listed investment companies a far better investment than previously is the change in legislation (applied after 30th June 2010)that allows them to continue paying dividends if they do not have sufficient retained or current earnings but are solvent, which is the current situation with WAA.
Some of the major listed investment companies made significant recent losses but WAA outperformed the market (which fell by 9.6%) by 9.9% for the 6 months to 31st December 2011.
One should look at the longer term to anticipate future earnings & dividends.
As long as WAA gradually increases its dividend over time I am confident the profits will more than cover them.
WAA Price at posting:
$1.04 Sentiment: LT Buy Disclosure: Held
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