AFI -

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ASX:AFI (Australian Foundation Investment Company) has maintained a highly stable, low-debt profile over the last 5 years with consistent profits and an ultra-low management fee. However, its earnings and dividend growth have been modest, with the dividend payout ratio exceeding recent earnings. [1, 2, 3, 4, 5, 6]

Financial Snapshot

• Profit: The full-year profit for FY2025 was $285.0 million (down from $296.4 million in FY2024). For the half-year ending December 31, 2025, the profit was $147.0 million. The profit drop was primarily due to trimmed bank holdings and lower dividends from resource companies. [1, 2, 3, 4]
• Debt: AFI operates a fortress-like, debt-free balance sheet with virtually no external debt. [1]
• ROE & Returns: The Return on Equity (ROE) has tracked around 3.28%. Over the past 5 years, earnings have grown by about \(2.5\%\) per year, and EPS growth has hovered around \(8.6\%\). [1, 2, 3]
• Management Expense Ratio (MER): AFI continues to offer an extremely low cost structure, with an MER of just \(0.16\%\) and no additional performance fees. [1, 2]

Dividend & Payout

AFI targets fully franked dividends that grow faster than inflation. However, in recent reporting, the dividend payout ratio has been elevated (over \(100\%\) of earnings), partially sustained by accumulated capital gains and franking credits. You can review ongoing payout updates on the Australian Foundation Investment Company (ASX:AFI) page. [1, 2, 3, 4, 5]

5-Year Performance & Outlook

As a Listed Investment Company (LIC), AFI's performance is tied to its underlying portfolio. The total portfolio return has generally mirrored the broader market, though it can periodically lag large-cap benchmarks due to its defensive, low-turnover tilt. The company aims to provide stable, attractive total returns with a heavy emphasis on dividends. [1, 2, 3, 4, 5]

For more details on their long-term performance, you can read the latest AFIC Annual Report or check the Performance - AFIC portal.

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