$4,000 buys 784 shares in an impressively reliable ASX dividend stock

The ASX dividend stock MFF Capital Investments Ltd (ASX: MFF) looks like one of the leading options for passive income.

The company is one of the leading listed investment companies (LICs) on the ASX, in my view.

LICs can be very useful for dividend-focused investors because they invest in a variety of shares, providing diversification. They can turn investment returns into consistent dividend payments.

I think MFF has all the factors to make it a top ASX dividend stock today and into the future. Let's run through those positives and then look at what a $4,000 investment could do.

Compelling investment style

Every fund manager invests with a different style and MFF's has proven to be very effective over the last 10 to 15 years.

MFF focuses on better quality investments that are seen to have sustainable profit growth prospects (even at higher interest rate levels). Ideally, it's looking for a combination of value and quality, giving it a margin of safety with its investments.

Over the last ten years, its pre-tax net tangible asset (NTA) return has achieved an average return of 15.5%. Of course, past performance is not a guarantee of future returns. However, it shows the type of success that investing in long-term compounders like Mastercard, Visa, Alphabet, Amazon and Microsoft can achieve.

While ASX dividend stock's portfolio is mainly focused on international shares (where many of the world's best businesses can be found), it does occasionally invest in ASX shares. L1 Group Ltd (ASX: L1G) is currently its largest ASX share position, with a portfolio weighting of more than 3%.

Rapidly growing dividend

With the strong investment returns of the portfolio, this LIC can pay significant dividend income to investors.

As of June 2026, the ASX dividend stock's five-year dividend compound annual growth rate (CAGR) was 26%. It increased the dividend by 4 cents per share in FY25, 4 cents per share in FY26. I expect it to increase its payout by another 4 cents per share in FY27 to 25 cents.

That potential payout for FY27 represents a year-over-year increase of 19%, which would be an impressive rise.

In FY26, it had a profit reserve of $1.77 billion and a franking credits balance of $272 million, showing that it has plenty of room to keep increasing the dividend for the foreseeable future.

Large dividend yield

If MFF pays an annual dividend of 25 cents per share in FY27, shareholders are in for a sizeable dividend yield.

At the time of writing, that potential payout translates into a dividend yield of 4.9% excluding franking credits and 7% including franking credits.

If MFF continues growing its payout, then the dividend yield will become increasingly attractive for someone who buys today.

What a $4,000 investment in the ASX dividend stock would do

At the time of writing, if someone were to invest $4,000 in MFF shares, they would be able to buy 784 shares. That could unlock $194 of dividend cash and $280 of grossed-up dividend income, including the franking credits.  

I'd be very happy to make that investment (or buy even more) while also considering other stocks as potential ideas for strong returns.

The post $4,000 buys 784 shares in an impressively reliable ASX dividend stock appeared first on The Motley Fool Australia.

Motley Fool contributor Tristan Harrison has positions in L1 Group and Mff Capital Investments. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Mastercard, Microsoft, and Visa. The Motley Fool Australia has positions in and has recommended Mff Capital Investments. The Motley Fool Australia has recommended Alphabet, Amazon, Mastercard, Microsoft, and Visa. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2026