The GQG Partners Inc (ASX: GQG) share price seems to me like an excellent ASX dividend share opportunity to buy a high-performance business.
GQG is a fund manager
that’s listed on the ASX but is a US-based business. It offers four main share, or equity, strategies: international equity, global equity, emerging markets equity, and US equity.
There are a couple of main elements that make me think that it’s a good investment option.
Strong FUM performance
The funds under management (FUM) of a fund manager is an important factor for profit. This is particularly true for GQG because most of its revenue comes from the managing of funds for investors, rather than performance fees.
GQG just released its FUM update for June 2023, which said that its FUM had risen from US$98.5 billion in May 2023 to US$104.1 billion at 30 June 2023. That’s a big jump and gives the company a good platform to deliver higher earnings in the second half of 2023.
The FUM growth is being delivered in two ways – strong fund investment returns, and good net inflows (which is being helped by the investment returns).
In the June 2023 quarter, net flows were US$1.2 billion, which is a solid amount of money coming in considering all of the uncertainty.
GGQ’s long-term fund performance is impressive and I think its funds are set up to do well, rather than being overly defensive, which will hopefully be a good thing for the GQG share price over the long-term. Though, there’s no certainty that GQG’s funds will continue to outperform the respective benchmarks.
Great dividend
GQG’s dividend policy is that it will send 90% of its distributable profits to shareholders, which ends up being a rewarding amount of money every quarter. The dividend can provide strong returns, even if the GQG share price doesn’t rise to reflect the FUM growth.
As FUM and earnings rise, then this can power the dividend higher.
Forecasts are just educated guesses, but it’s useful to know what the business could end up paying to shareholders.
The current dividend forecast on CMC Markets suggests that the annual dividend in 2024 and 2025 could be $0.138 per share and $0.15 per share, respectively, which would be yields of 9.2% and 10%.
Strong dividends, dividend growth and potentially share price growth for GQG could lead to good shareholder returns over the next few years.
