With the current share price $1.01 & the interim dividend increased, as expected to 4.0c, we could safely assume the final dividend would also be 4.0c considering it is Geoff Wilson's intention to pay an increasing dividend stream.
The total 8.0c annual dividend would make the yield 7.92% fully franked with prospects of a possible 5.0c + 5.0c next year if the share prices are positive.
The market capitalisation is currently only about $16 million & it is Geoff's goal to increase it to $100 million. This means that down the track we should expect a series of 1 for 1 free options to raise the capital base.
Wilson Asset Management do the buying & selling of shares for the 3 Wilson companies, WAM, WAA & WAX, then allocate the number of shares to each company depending on the reason for the purchase or sale. All three companies do not necessarily receive an allocation.
On a similar basis WAM's final dividend should be 5.0c (10.0c annually)which would be a yield of 6.289% based on the last sale price of $1.59.
Therefore WAA with a yield of 7.92% looks under valued.
The share price would need to be $1.27 to bring it into line with WAM. I know it has not yet achieved WAM's longer track record but on the basis of how shares are bought & sold the share price should be much higher.
While the overall market has been more or less been moving in a trading range a company like WAA, that is more active in its buying & selling, should out perform other listed investment companies that have less movement in their portfolios.
WAA Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
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