Argo flags modest growth expectations Listed investment company Argo Investments has warned of weak earnings growth in Australia over the coming year as subdued economic conditions force companies to cut costs. Speaking at the company's annual general meeting from Sydney, Argo chief executive Jason Beddow said the sluggish Australian economy had led to a lack of new investment decisions being made across a number of industries. ""Against this backdrop, we do not expect strong earnings growth from Australian companies over the coming year and therefore predict only modest dividend growth,"" he said. ""Particularly with the payout ratio of companies in the S&P/ASX 200 Index approaching the higher end of their historic range, at around 75 per cent."" Argo shares opened 0.4 per cent higher at $7.30. He said, however, there would be some growth in dividend payments where there was modest earnings improvement. The group sold its stake in Australian United Investment Company and Diversified United Investment resulting in $20.1 million and $15.4 million windfalls respectively. ""The proceeds will be re-deployed in a more concentrated manner into our preferred stocks,"" Mr Beddow said. Argo's top 20 investments, including Ramsay Health Care and Twenty-First Century Fox, provide around two thirds of the company's income for the year. ""We have continued to prioritise investments in larger, well capitalised companies with relatively high, predominantly franked, dividend yields and scope for growth,"" Mr Beddow said. Argo has spent $32 million on further investment purchases since the financial balance date, with major ones in Wesfarmers, Commonwealth Bank, Steadfast Group, Telstra and Brambles. Over the year it has also increased its stake in the banking sector. ""Since this time last year, our main changes have been an increase in our weighting to banks and energy and a decrease in listed investment companies,"" Mr Beddow said.