What’s better than high income share? A high-yielding stock that continues to grow its dividend!

In recent years it has been an correct description of one detail FTSE250 investment trust.

History is not necessarily an indicator of what will happen in the future. But could things continue as before?

Profitability close to double digits

The share in question is Henderson’s income in the Far East (LSE: HFEL).

It basically aims to do what it says on the tin, which is invest in companies operating in the Asia-Pacific region to generate cash that it can employ to finance dividends.

Indeed, as trust managers say, “seeks to provide shareholders with increasing total annual dividends per share as well as capital appreciation“.

Currently, the profitability is 9.6%. This places it among the high-yielding stocks on the FTSE 250 index.

Mixed long-term results

Moreover, the trust has increased its annual dividend every year for over a decade. It intends to continue doing so, although no stock can guarantee that the dividend will continue to grow.

So as a share of income it’s doing well. However, capital gains or losses are also a factor that investors must consider, even if they are buying stocks with income as their primary goal.

Here the picture is more mixed.

Over the last year, Henderson Far East Income’s share price gain of 28% has outpaced the 20% gain in the broader FTSE 250 index.

However, if we step back and look at the five-year period, we see that although the FTSE 250 index is up 3% over that period, this particular share fallen 22%.

Dividend share to consider

The long-term price decline has helped boost the dividend yield.

However, on a less positive note, the stock is currently trading at a premium of 7% to net asset value. So is it still worth considering for an investor looking to augment their passive income streams?

I think the answer is yes.

I generally don’t like paying a premium to net asset value.

However, over time, Henderson Far East Income has proven itself as a well-managed, diversified investment fund that has managed to turn the growth of Asian economies into huge dividends for its shareholders.

There are risks, such as the possibility of weakening industrial demand in China as a result of a drastic augment in oil prices.

But as a fund manager said last week, especially in the context of the discussion about the war in the Middle East: “The growth drivers in our markets are broad-based and have already demonstrated resilience in uncertain times“.

In the miniature and medium term, this thesis may be tested. However, in the long term, I remain positive about this stock’s earnings potential.