Will the release of the FY19 report, with a special dividend, boost the Bki Investment Co Ltd (ASX: BKI) share price?

Bki Investment Co is a listed investment company (LIC) that was formed in 2003 to take over and manage the investment portfolio of Brickworks Limited (ASX: BKW). Bki’s objective is to generate an increasing income stream through a long term investment portfolio that would grow over time. The core portfolio was created around 30 years ago.

Bki FY19 Result

The company reported two sets of numbers. There has been a lot of special dividends this year as companies reacted to the proposed Labor franking credit changes.

Excluding special investment income, Bki’s net operating profit grew by 11.1% to $49.15 million, but profit per share (EPS) fell by 4.9% to 6.75 cents. Bki declared an ordinary dividend of 7.325 cents per share, being the same as last year.

Including special investment income, Bki’s net operating profit jumped by 66% to $74.7 million and its EPS grew by 41.9% to 10.26 cents. A total special dividend of 2.5 cents per share was declared.

Therefore, the total dividend declared for 2019 was 9.825 cents per share, which was a 34.1% increase compared to last year. However, I imagine next year will show a decline including special dividends.

Bki received $4.35 million in special dividend income from businesses like Telstra Corporation Ltd (ASX: TLS), Insurance Australia Group Ltd (ASX: IAG), Woolworths Group Ltd (ASX: WOW), BHP Group Ltd (ASX: BHP) and Wesfarmers Ltd (ASX: WES).

Bki also received special investment income of $15.54 million from off market share buy-backs from BHP Group and Caltex Australia Limited (ASX: CTX).

The LIC also reported a further $8.09 million of special investment income after receiving Coles Group Limited (ASX: COL) shares.

Bki Co-Portfolio Manager Tom Millner said: “These special dividends declared by the BKI Board distribute to shareholders a portion of the company’s accumulated franking credits which, with the issues surrounding franking credits earlier in the year and more recently with a reduced Term Deposit rate, will be of significant value and benefit to many BKI shareholders.”

Is BKI A Buy?

Whilst Bki has an attractively-low management expense ratio of 0.17%, which has dropped over the years, I don’t think it’s good that the company is paying out more than 100% of its ordinary earnings in what has been a good year for ASX shares.

It does have quite a large dividend yield, but I think there could be better ideas like the shares in the free report below instead.

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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).

At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.