80,450 shares of this ASX dividend stock pays an income equal to the Age Pension

Australia's Age Pension is very generous and offers a number of positives, including protection against inflation. If I were relying on income, I'd rather receive payments from Argo Investments Ltd (ASX: ARG) and other ASX dividend stocks.

Argo Investments is one of Australia's oldest and largest listed investment companies (LICs). It was founded in 1946 and has clearly succeeded with its targets.

It speaks volumes that cricketing legend Don Bradman joined the board in 1954 and served until 1984. Argo's strategy has been steady, long-term investing, resulting in solid performance of the portfolio.

Let's run through why the business is so appealing today.

Diversification

The job of an LIC is to invest in other shares/assets to generate investment returns.

Argo's portfolio is focused on large ASX shares that enable the LIC to provide reliable fully-franked dividend income and capital growth.

For pleasing diversification, Argo has invested across an array of ASX shares.

At the end of September 2026, the businesses that were a weighting of more than 3% in the Argo portfolio, included BHP Group Ltd (ASX: BHP), Macquarie Group Ltd (ASX: MQG), Rio Tinto Ltd (ASX: RIO), Commonwealth Bank of Australia (ASX: CBA), ANZ Group Holdings Ltd (ASX: ANZ), Wesfarmers Ltd (ASX: WES), Westpac Banking Corp (ASX: WBC), CSL Ltd (ASX: CSL), Santos Ltd (ASX: STO), Telstra Group Ltd (ASX: TLS), National Australia Bank Ltd (ASX: NAB), and Aristocrat Leisure Ltd (ASX: ALL).

As you can see, it's many of the ASX's leading blue chips.

Its performance has been solid – at 30 June 2026, its pre-tax net tangible assets (NTA) after costs was stronger than the S&P/ASX 200 Accumulation Index (ASX: XJOA) over the prior six months, 12 months, three years, and five years.

That solid performance has been good enough for the ASX dividend stock to pay good passive income over the last few years.  

Rising dividends

After a difficult start to the 2020s following COVID-19 impacts, the LIC increased its payout in FY22 and FY23, maintained the payout in FY24, grew it in FY25, and hiked again in FY26.

Pleasingly, the company has guided that it plans to hike the dividend again in FY27 to 40 cents per share with four quarterly dividends of 10 cents per share.

The FY27 payout would represent a year-over-year increase of 3.9%, so it essentially matches the current elevated rate of inflation.

Good dividend yield

Argo can provide investors with a solid dividend yield, which I think is appealing. I'd rather have a mixture of yield and long-term growth rather than a big yield and no growth (or declines).

At the time of writing, and based on the guided annual dividend of 40 cents per share, it translates into a forward dividend yield of 4.4% excluding franking credits and 6.3% including franking credits.

This is much more appealing passive income than what's on offer from Vanguard Australian Shares Index ETF (ASX: VAS).

How much of the ASX dividend stock it would take to match the Australian Age Pension

Currently, the maximum annualised Age Pension that a single person can receive is approximately $32,180.

To receive that much from Argo in relation to its FY27 dividend, an investor would need to buy 80,450 shares. Considering (at the time of writing) it's trading at a discount of 17% to its pre-tax net tangible assets (NTA) at 16 October 2026, I think it's a good time to buy. But, I'd also want to invest in other ASX dividend stocks too for dividend diversification.

The post 80,450 shares of this ASX dividend stock pays an income equal to the Age Pension appeared first on The Motley Fool Australia.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Macquarie Group, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended BHP Group, CSL, Macquarie Group, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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